Singapore Media Watch

Wednesday, February 27, 2008

Buck up or lose Voltri deal, Merlo tells PSA-Sinport

By John McLaughlin in Genoa - Tuesday 26 February 2008

GENOA’S new port president Luigi Merlo warned PSA-Sinport chief executive Eddie Teh at a meeting on Monday that the Singaporean company may lose the concession at the port’s flagship Voltri terminal if it did not take immediate steps to improve its performance.

Interviewed at the port authority’s Palazzo San Giorgio headquarters, where he took over earlier this month, Mr Merlo said PSA subsidiary VTE had consistently failed to meet the volume targets established under the terms of its operating concession at Voltri.

Though it had finally hit target last year, exceeding 1m teu in throughput for the first time, 2008 had begun disastrously. The terminal was already under severe pressure from a combination of local transport strikes, surging volumes, and a slowdown by customs workers when it made the ill-advised decision to introduce a new Cosmos terminal management system.

The result was several weeks of near-chaos, with Voltri forced to call a halt to all container exports and furious agents and forwarders initiating legal action over loss of earnings. The port authority will take a similar course, Mr Merlo confirmed that a port committee meeting tomorrow is likely to approve a claim for lost revenues and damage to the image of the port.

Mr Merlo’s hard line with VTE is the culmination of years of disgruntlement within local shipping circles at the terminal operator’s poor performance, with poor communication and lack of consistent investment in the terminal cited as critical weaknesses.

But it is also indicative of Mr Merlo’s desire to give new impetus to a port that has been adrift for years, its market share slipping away inexorably as its leading lights bickered, and in the absence of a long-term development plan worthy of the name.

He said Mr Teh had agreed to discuss specific measures to improve Voltri’s performance at an upcoming PSA board meeting. He added that “they have six months to put things right. But their volume target this year is 1,163,000 teu and they have already had two poor months. And this is a terminal that should be able to handle 2m teu.”

Voltri’s woes come at a dark time for the port, with Giovanni Novi, Mr Merlo’s predecessor charged with fraud, extortion and interfering with a public bidding process in relation to the apportioning of space at the port’s multipurpose terminal and a range of other Genoese notables under investigation.

Yet Mr Merlo insisted that the calamitous start to the year also provided an opportunity for a thorough house-cleaning. He said he was in the process of analysing the various concession contracts for the multipurpose terminal, and that where terminal operators were not meeting expectations he would move to ensure they did on pain of eviction, seeking special powers from Rome if necessary.

Though the fate of the multipurpose terminal, and specifically a decision on whether to press ahead with a new concession bidding process, must await legal developments, he said that his preference was for a single concession. The current system, with the terminal split into small slices run by a number of discrete operators, “is the wrong way to run a port. ”

Genoa’s terminal operators will only have a future if they join together,” he said, adding that while he hoped to set the port of Genoa on the right course “without trauma or explosions,” tough measures might well be unavoidable.

As for the port’s long-term development, he said he still hoped to secure acceptance for the construction of a new box terminal at the site of the former steel works at Cornigliano. He also said he would work with Genoa’s mayor, Marta Vincenzi, on integrated development plans for both port and city, the better to resolve disagreements early and speed the process.

Source: Lloyd's List

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