Bad management costing Balearic nautical sector millions of euros

PALMA
THE Balearic nautical sector, which has been hit hard by the culmination of the global recession, the severe lack of proper regulation and discriminatory taxes, yesterday stepped up its campaign to resolve the industry's problems.

FENIB, the Federation of Balearic Nautical Businesses held its first meeting with the local media yesterday and sources said it was a “great success”.
Federation President, Bartomeu Bestard, spelt out the key problems facing the local nautical industry and explained why it is losing money, jobs and competitiveness.

Apart from the much publicised matriculation tax which has all but ruined the country's charter industry, one of the other big problems here in the Balearics is the uncertainty over the RENEWAL of port concessions which will come up for renewal between 2018 and 2020.

Bestard said that the uncertainty has put a stop to private investment in the local marinas and he estimated that the doubts continuing to hang over the renewal of the concessions has cost the industry between 200 and 300 million euros.

This lack of clear regulation and the fact that some ports and marinas come under the control of the state Port Authority while others are controlled by the Balearic government's Ports de les Illes Balears or Ports IB means that concession holders are left swimming against the tide between the two bodies which, according to FENIB sources, in the case of the state authority is more interested in the money than the well being and sound management of their ports and marinas.

According to Bestard, the industry wants all the region's ports and marinas to come under the control of Port IB so that clear and unified regulations can be introduced to clear up the confusion which is costing the industry millions of euros in private investment.

But, the nautical industry, which the local tourism authorities are always keen to show off and talk up as being a key dynamo of the local economy, has even more problems and challenges to overcome to live up to its billing.

Majorca's dock yards were some of the most respected in the Western Mediterranean but the slow down in activity in the charter industry because of the hugely unpopular matriculation tax of 15 percent, which is levied by no other country in the European Union, on the yacht charter industry and VAT running at 18 percent is causing serious damage to the industry.

Competing destinations like Italy and Malta do not have a matriculation while other countries like France and Greece levy minimal charges. A flourishing Balearic charter industry would bring in around 600 million euros per year, much more than the 1.5 million euros raised by the matriculation tax in 2009.

But, not only would scrapping the tax open the flood gates to the charter industry, it would in turn create hundreds of new jobs and nautical-related businesses from engineering to outside catering.

It was also proposed at yesterday's meeting that the current rate of 18 percent VAT the nautical industry is required to pay be reduced to around 8 percent, in line with the hotels and other fiscal incentives be looked at in order to properly regulate and stimulate the nautical industry.

The move to scrap the matriculation tax has reached the European Commission, but that is as far as it has got for the time being with the Spanish government standing firm.

But, the Balearic government could help ease the financial pressure in the meantime and take a leaf out of Catalonia's book where the regional government subsidises 30 percent of tax in an attempt to help the local industry.