Greek coastal shipping: Over 80 million euros in subsidy arrears for “barren lines”

The debts of the Ministry of Shipping to the coastal shipping companies which after securing tenders serve “barren” lines in return for subsidies exceeding 80 million euros.

The problem with subsidy compensation

The problem, according to players in the coastal shipping industry, is due to the fact that the money intended for the compensation of the coastal shipping companies is drawn from the “bucket” of the Public Investment Program (PDE) which is “drying up” due to repeated crises (pandemic, energy crisis, etc.) etc.), with the result that, as is typically said, the funds are allocated based on how “powerful” each ministry is and not the actual needs.

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The inclusion of the funds for the barren lines in the PDE was announced by shipping minister Yiannis Plakiotakis on September 18, 2019, together with the expansion by 40 million euros of the annual subsidy, which now reached 130 million euros, compared to 90.7 million euro before. The barren lines are a development project and are now financed as such, the minister had emphasized, announcing their inclusion in the PDE. In addition, the barren lines of the country are financed as a recurring action for the following years, with guaranteed resources and with the necessary flexibility for uninterrupted financing, but also the possibility to cover additional or emergency needs that may arise.

However, in the end, this “model” seems not to be “working” in times of crisis, when needs multiply, as industry pundits believe.

As they explain, the financing of barren lines is an inelastic expenditure and serves both national and social reasons and should be treated as such.

The Attica Group

It should be noted that a significant part of these compensations (over 48 million euros) is owed to Attica Group. The country’s largest shipping group, in a relevant letter to Mr. Plakiotakis, strongly complains about the delay in the payment of compensations, while it speaks of discriminatory behavior as other companies receive compensations for “recently invoiced services”. Attica Group claims they have been “receiving” money owed since February 2021 for services provided in January 2021.

Delays in the payment of compensation seem to have also played a role in the fact that in the tender held on October 20 at the Ministry of Shipping for the service of “barren lines” for the new route period 1/11/2022-31/10/2023, no interest was shown in two very large and particularly “energy-intensive” (high fuel consumption) barren 99+\routes, those of Kasos-Karrpathos of Kasocarpathia and the North Aegean (from Piraeus to Kavala, via Samos, Chios, Mytilini).

The lines of the North Aegean are now served by the Attica Group, which will continue to operate them until the end of the tender and in any case until 28/02/2023. Mr. Plakiotakis had promised to upgrade the Kasos-Karpathos line with a class B ship, but which ultimately did not appear in the competition. For now, however, this particular line will be served again by the ferry “Prevelis” until the tender is completed and in any case until 28/2/2023.

New arrivals

In the meantime, according to the recent opinion of the Coastal Transport Council, a new high-speed ship (Santa Irini) is launched in the Aegean, specifically on the Heraklion-Santorini route in the summer season.

Also in the summer of 2023, a new route will be made by the fast ferry “Thunder” of Fast Ferries on the line Piraeus-Cyclades-Heraklion Crete three times a week. The interesting thing here is that “Thunder” will operate in addition to Minoan Lines’ high-speed ship “Santorini Palace”, as one will go leave Piraeus as the other will leave Heraklion and vice versa. Santorini Palace ran this route three times a week this year.