News
July 30, 2010
Chamber wants second look at tug service

This country’s Chamber of Industry and Commerce has called on the government of St. Vincent and the Grenadines to take a second look at the mandatory tug and towage service that was implemented last month.{{more}}

The Chamber, in a release issued on Monday, July 26, also called for a review of the charges for the use of the service, which they say will not only affect consumers but may also hinder the country’s regional and international trade relationships.

The service which was introduced in accordance with an amendment to the St. Vincent and the Grenadines Port Authority Act was granted exclusively to W.J Abbotts and Sons Ltd to operate in Port Kingstown, Campden Park and Great Head Bay on behalf of the Port Authority.

While the Chamber acknowledges the importance of a tug service, they indicated that they also recognize the ‘somewhat albeit adverse reaction in the business community’, which includes the mandatory use of the service.

“With regard to the ports in St. Vincent, history suggests that the majority, if not all vessels entering and leaving the ports, have done so safely without the use of a tug service,” the release stated. “In consideration of this and the mentioned determinant factors, whilst the tug service may preclude an alteration in such fortunate trend, the compulsory condition of the policy may not necessarily be justified.”

The release listed a number of countries in the region that have tug services, and pointed out that there are some instances where fees are not applied.

The list also highlighted that where fees were charged, they were considerably lower that those that are being charged here.

These range from US $400-$500 per move in St. Lucia, charges by the distance in Barbados, no charge for vessels under 1000 gross tons in Trinidad and Tobago, to US $650 for vessels between 2001- 10,000 Gross Registered Tonnage (GRT) in St. Kitts.

In Grenada and Dominica, there are no tug services.

“As evident, the costs for St. Vincent and the Grenadines, which range from US $1110 to $6500, are much higher than any of the other countries quoted above. Given the comparatively high cost implication, the Chamber strongly recommends a review of the level of the charges,” the release stated.

The release went on to state that the reaction of the shipping agents suggests that the charges will be passed along to the consumer rather than be borne by the business as a cost of doing business.

To this the Chamber recommended that an extensive analysis be carried out to ensure minimal trickle down cost implications on end users.

“We must also be mindful that the higher cost of doing business inevitably places St. Vincent and the Grenadines at a trading disadvantage. This could impact our interregional trading opportunities, particularly trade in the OECS.”

“Beyond the regional implications, consideration must also be given to the impact of the new charge on the worldwide competitiveness ranking of St. Vincent and the Grenadines.”

The Chamber also questioned the exemption of cruise and Geest lines from the fees and noted that ship owners and operators should be given comprehensive information on the liability of the tug operators to them with regard to unforeseen and/or adverse circumstances.

According to the release, the Chamber has offered to host a meeting between ship agents, the Port Authority and the relevant ministries of government, with a view to resolving the issues in the best interest of all concerned.

“We further appreciate that the introduction of the tug and towage service may contribute to overall port efficiencies,” the chamber said. “However, it is vital that such efforts towards efficiency improvement are not isolated and not just for the sake of revenue generation.”

“We anticipate that a holistic approach is adopted such that the port developments are being benchmarked against port operations best practices world wide.”