Malta Enterprise imposes 1500% increase on service charge for factories

Industry operators are up in arms with government after learning that the charge for maintaining the areas around their factories is set to dramatically increase, triggering fresh pressures for layoffs and increased loss in competitiveness.

Industrialists have been shocked to learn that the service charge for maintaining the grounds around their factories by Malta Industrial Parks has been increased from 42 cents per square metre to €7 per square metre, representing a whopping 1,500% increase.

Operators who spoke to MaltaToday expressed anger at the decision, that such a burden will simply put them out of business.

Facing an already difficult global economic crisis, industrialists are faced with no option but to either layoff workers or shut down, as the costs to run the business will simply not add up anymore.

While Malta Enterprise and Malta Industrial Parks Executive Chairman Alan Camilleri was unavailable for comment, a spokesman for the Finance ministry told MaltaToday that after the new tariffs were introduced in contracts for new tenants in October 2009, “the service charge will be implemented through legislation later on this year to establish a level playing field amongst all tenants in industrial zones.”

This statement confirmed Malta Enterprise intention to implement the drastic increase across the board, and no longer limit the €7 charge per square meter to new tenants.

According to the Finance ministry, an investment programme of €16 million is under way this year to upgrade four industrial parks. The ministry argued that the rate of the service charge is “still the lowest in Europe” and the collection of the charge will be funnelled back to the industrial park,s to make up for the costs of its administration, maintenance and upkeep.

Contacted yesterday, a spokesman for the Malta Chamber for Commerce, Enterprise and Industry said that the issue on factory service charges has been on the agenda since mid-last year, and is in the process of compiling a survey among its members, in a bid to have a better understanding of the situation.

While talks are underway with government to find a solution to the hefty increases, the Chamber spokesman added that a comparative study with rates paid by factory operators around the EU is also under way.