The Malta Freeport Terminals

Thirty-four years in the making

Peter Paul Barbara interviews Malta Freeport Terminals Ltd CEO Mr Alex Montebello

The Port of Marsaxlokk has been a main protagonist in Maltese History, as has our Grand Harbour. The Port of Marsaxlokk was the port which hosted the beginning of the end of the Cold War, while the Grand Harbour was instrumental in curtailing the Ottoman expansion into Central and Northern Europe.

Mr Alex Montebello CEO Malta Freeport Terminals Ltd

Between the 2nd and 3rd December of 1989, the Port of Marsaxlokk hosted what came to be known as the Malta Summit, the second most important summit after the end of the Second World War and the Yalta Summit, between the leaders of the two main superpowers of the time, the President of the United States George H. W. Bush, and the General Secretary of the Union of Soviet Socialist Republics, Mikhail Gorbachev. This Summit was instrumental and surely contributed to bringing an end to the bitter Cold War at the time, a summit which followed the fall of the Berlin Wall a few weeks before. Later, the Port of Marsaxlokk was to host the largest transshipment port in Malta, which would contribute to the economic recovery of the Maltese Islands after the closure of the British Military bases in Malta.

In previous editions of T-21 we took extensive looks at the Port of Valletta and future plans laid out for its development by Government, but we haven’t looked at Malta’s largest port, the Port of Marsaxlokk and the Malta Freeport, which throughout the years has established itself as one of the leading transshipment hubs in the Mediterranean.

In this edition, we sat down with Mr Alex Montebello, Chief Executive Officer of the Malta Freeport Terminals Ltd, to have a chat about the beginnings of this port 34 years ago and where it sees itself in the future. How did the idea of building a Freeport in Malta originate?

Setting up a Freeport in Malta was an idea long in the making. In the mid-sixties, the potential for a Freeport in Malta had already been recognised, and after the departure of the British Armed Forces from the island in 1979, the need to generate new sources of income for the country as well as projects and initiatives to serve as a stimulating economic activity, was greatly felt, and the idea of building a Freeport was among these.

Construction works on the breakwater in the Port of Marsaxlokk and on Terminal One commenced in the late 1980s. Given the island’s strategic location, a transshipment hub at the time was seen as an ideal opportunity, as the Grand Harbour, Malta’s leading port for centuries, was not a viable option to be developed as such. So, after years of studies, the Port of Marsaxlokk, with its natural deep waters, was identified as the most suitable location for such a development to be accommodated, and a political decision in this sense was taken to build a Freeport.

The Maltese Government set up a company in 1988 to achieve this objective. Strategic and sustainable growth was an objective from the very start, and substantial investment was poured into the facility, which grew from one container terminal to two in just over a decade, as well as recruiting and training the best personnel available.

How has the Malta Freeport developed commercially since its early years?

Malta Freeport was privatised to CMA CGM in 2004. Moving on, today’s shareholders – as it is jointly owned by Terminal Link, holding a 50% share in Malta Freeport and composed of CMA CGM (51%) and China Merchants Port Holdings Company Limited (49%), with the other 50% being held by Yilport Holding Inc.– have been fully committed to an ambitious investment programme.

These changes have brought with them significantly improved efficiency of operations and provided a clear distinction between the authority and the operator. Malta Freeport Corporation Limited solely fulfils the role of landlord and authority over the Freeport zone while Malta Freeport Terminals Limited is now the single operating company of both container terminals and the warehousing facilities.

And recently?

Under my stewardship Malta Freeport Terminals is today a leading hub in the Mediterranean region, and one of the few that is capable of handling the latest class of megamax containerships, which are over 400 metres in length and carry 23,000 TEU containers.

Since its privatisation, the Freeport has been transformed by a €320 million investment programme in infrastructure, equipment, digitalisation, and personnel development. Last year alone, the company invested €20 million for an additional two megamax quay cranes, which are now fully operational, presenting the Freeport with a five megamax crane formation on Terminal One. In 2017, after fulfilling all its investment obligations, the Licence and Lease Extension between Malta Freeport Terminals and the Government of Malta was extended for an additional 30 years to 2069.

The investment undertaken over the years has paid dividends: major shipping lines calling at the Freeport include the Ocean Alliance – CMA CGM, Cosco, OOCL and Evergreen – as well as MSC, HapagLloyd, Marfret, and ONE.

What was the performance of the company in 2021 and what is the projected growth for the near future?

In 2021, the Malta Freeport handled almost 3 million TEUs, which equates to a 22% increase in traffic volume over the previous year, whilst a total of 1,690 ships made calls at the Terminals. Plans are in place to increase the capacity to 4 million TEUs in the not-too-distant future as the Freeport continues to expand operations while maintaining its efficiency.

Sometimes we hear of complaints from the residents about operations. How is the company addressing these and how is it introducing green credentials?

Malta Freeport is committed to minimise the impact of the facility’s operations on the environment. Air pollution has been reduced in the area where the port is located, as all seagoing vessels must now comply with the IMO 2020 regulation, which states that ships have to use fuel with Sulfur oxide level equal to or less than 0.5%, compared with the previous level of 3.5%.

Additionally, more and more vessels are now being powered by LNG (Liquefied Natural Gas) in conformity with the IMO strategic plan for 2050, which aims to reduce gas emissions in the sea by 50%, while working to eventually eliminate them completely.

LNG Powered Vessels

The Freeport is proud to regularly handle the largest LNG-powered containerships in the world, with a capacity of 23,000 TEUs operated by CMA CGM

on the prestigious French Asia Line Service (FAL1), which connects North Europe to Asia through the operation of CMA CGM’s 9 LNG-powered containerships with a capacity of 23,000 TEUs. Malta Freeport is also handling the 15,000 TEU LNG vessels, which are calling at the Freeport on the MEX1 Service.

These LNG-powered vessels use the world’s best environmentally friendly technology, which emits up to 25% less CO2 than fuel-powered systems, uses 99% less Sulfur dioxide and saves 92% in Nitrogen oxide emissions. This is a much higher standard than is currently required by regulations.

Environmentally friendly crane technology, less noise pollution and LED Lighting

Furthermore, the facility’s new megamax quayside cranes have outstanding technological and environmental specifications. Lower electricity consumption, due to the lighter structure, and LED lights significantly reduce their CO2 footprint, while new technology allows for more efficient engaging and disengaging, thereby reducing noise.

The Freeport is not only upping its green credentials but is also investing heavily to improve safety for its employees. It has invested significantly in 15 RubberTyred Gantry Cranes (RTGs) that are equipped with advanced technology which reduces energy consumption and improves air quality while offering a safer working environment.

These new cranes are fitted with safety alarms that are considerably quieter than the conventional beeper alarms previously in use. The Freeport has also retrofitted these quieter alarms on the existing fleet of RTGs, thereby substantially reducing noise from the facility.

Moreover, full cut-out light fittings have also been installed at Terminal One, the terminal closest to the village of Birżebbuġa, where the port is located, to address light impact concerns such as glare, light spillage and sky glow. Terminal Two lighting has also been adjusted.

Malta Freeport also completed a 2.43 MW solar panel project, generating over 3,600 MWh of energy per year. This is equivalent to savings of over 2,000 tonnes of CO2 per year.

The Grand Harbour is currently being fitted with ship-to-shore technology; is Malta Freeport looking in this direction as well?

Yes. In fact, the Malta Freeport Corporation has just recently published a tender for a ship-to-shore project. Once operational, in 2024, the ship-to-shore

project, which will be a Government investment, will contribute to cleaner air, less noise and vibration, and less CO2 impacting the atmosphere, further strengthening the Freeport’s environmental sustainability credentials as well as significantly reducing inconvenience to residents caused by engines of berthed container ships.

What are the Company’s plans for the future?

Malta Freeport constantly strives to invest in cuttingedge technology. The Company offers clients digital services through the use of in-house portals with real-time operation monitoring. It also recently upgraded the Terminal Operating System, bringing the Freeport’s operation in line with the latest TOS technologies, as well as deploying a high-end wireless technology system using CISCO Fluidmesh ultra reliable wireless backhaul for optimum connectivity.

Malta Freeport has also implemented big data projects and IoT platforms to further enhance its operations. This innovative project will assist the Freeport to determine operational bottlenecks through the processing of vast amounts of data through single interfaces.

Malta-based businesses and international ones alike also benefit enormously from the Freeport – which today provides links to 110 ports worldwide, over 50 of which are in the Mediterranean – since they can take advantage of the facility’s efficient service.

The Freeport is also a major contributor to Malta’s economy, generating €170 million per annum, or 2% of the GDP. This sustains thousands of jobs, both directly and indirectly.

While the past two decades have been transformational for the Freeport, the Company is determined to continue driving the facility forward with a focus on modern business strategies and technology to further enhance its standing within the Mediterranean region and beyond.