Cabo Verde: Shipping company willing to review inter-island links

The management of the Portuguese group ETE was on Friday ready to review the concession contract for public maritime transport of passengers and goods, assured by CV Interilhas with the Cape Verdean government, hoping to improve the service provided.

The position, taken by the vice-president of the ETE group for Cabo Verde, Jorge Maurício, in a statement to Lusa, comes after the Cape Verdean deputy prime minister, Olavo Correia, announced in parliament on Wednesday the renegotiation of that concession contract, which began on 15 August 2019 and was awarded in an international public tender for 20 years to CV Interilhas (CVI), led by Transinsular (ETE group).

“The state, as the concession holder, always has the prerogative to re-evaluate the public service concession contract for the transport of passengers and goods between islands, in order to improve it, for the benefit of the market, customers and contracting parties,” the group’s director said.

Jorge Maurício assured that the CVI board “will do everything to collaborate, make the necessary adjustments and continuously improve the cabotage passenger transport, logistics and goods distribution system” in Cabo Verde.

“The interests are convergent and all are aligned with the principle of creating an increasingly strong company. A year and a half after starting, CVI is a national reference company and is every day fulfilling its noble mission of connecting the country, through trips with defined itineraries and schedules, with predictability, safety and quality, something that had never happened in Cabo Verde”, he stressed.

Furthermore, and “as partners in the concession”, he assured that the management is “totally open to seeking better solutions” to “gradually build a system that serves the interests of Cape Verdeans and the country in general at all times”.

As an example, he pointed out that CVI recently reorganised the board of directors, with the group of 49% minority shareholders (Cape Verdean shipowners) “having one more director,” like Transinsular, which has a 51% stake, but “both unpaid.

“So as not to burden the company’s accounts any further. There is more and more harmony among shareholders, more and better communication, sharing information and knowledge,” he said.

In parliament, Olavo Correia, who is also finance minister, explained that “reflection” has already begun between the parties, to review the concession contract, hoping “quickly to reach an understanding.

“What is at stake here is, based on experience in the field, on concrete experience, to have sufficient information that now enables us to have a more optimised contract of what has been established based on studies and assumptions,” Olavo Correia announced.

For the contract for this service, the state pays the company an annual compensatory allowance, taking into account that several routes are commercially loss-making. Asked by parliament about possible cuts in this annual compensation, he recalled that when the assumptions in the concession contract, such as frequency, fleet capacity and vessel characteristics, were “changed, the costs would certainly change”.

“What we want is to adapt the technical specificities of the vessels of the chartered fleet in the concession, to provide the contract with instruments of financial control and to try to create a more optimal service for the two parties”, he stressed.

Lusa previously reported that the Cabo Verde government planned to renegotiate this year’s concession contract for the public interisland maritime passenger and cargo transport service, as set out in the supporting documents for the 2021 budget which includes a cut of almost 30% in subsidies, including compensation to CVI.

“The subsidies item is budgeted at 629 million escudos [€5.6 million] for 2021, forecasting a 29.4% decrease compared to the amending budget for 2020, justified mainly by the projected renegotiation of the concession contract for maritime lines,” the document reads, this being one of several cuts planned by the government to try to rebalance public accounts, affected by the crisis generated by the Covid-19 pandemic.

For 2020, in the budget drawn up after the Covid-19 pandemic and which came into force in August, the same item – around half for subsidising maritime transport – was budgeted at 891 million escudos (€8 million), compared to the 729 million escudos (€6.6 million) initially planned, and in 2019 at 160 million escudos (€1.4 million), but in this case, the CVI concession did not start until mid-August.

The management of CV Interilhas – a company criticised by the opposition, which contests the award of the concession to a company with a majority foreign capital – predicts losses of €4.5 million in 2020, due to Covid-19.

In its first year of activity (until August 2020), CVI transported 423,000 passengers between the Cape Verdean islands, in 4,060 trips, in addition to 39,000 vehicles and 41,000 tonnes of general cargo.