Lessons to be learnt
01 Mar 2007
Australia’s experience of liberalisation of its pilotage industry has been less than positive.Alex Hughes examines what went wrong
Experience with pilot services in Australia is often cited in support of claims that privatisation of pilot services does not necessarily bring benefits to the shipping industry as a whole.
In 1993, pilotage services on the Great Barrier Reef were effectively privatised, as competition authorities decided they wanted to end state monopoly provision. However,Wel Gamble, vice president of the Australian Marine Pilots Association, points out that, even then, rates were regarded as particularly economical, while the service on offer was a safe one.
“Prior to 1993,we had had only three vessels running aground in 25 years. Since then, nine ships have grounded at a rate of approximately one a year, while the price shipping companies have to pay for pilot services has been radically reduced.”
While the Australian Maritime Safety Authority is undoubtedly happy with the cut in rates, significantly no other national harbour authority has adopted the same ‘free-for--all’ privatisation approach. Instead, they have put management of pilot services out to competitive tender, albeit with the eventual concessionaire retaining an effective monopoly.
On the Reef, pilots’ remuneration has been significantly reduced,while cost cutting has resulted in the use of the cheapest possible ships to undertake their service. Nothing, according to Mr Gamble, is properly resourced any more and safety has been compromised.
He explains that this happened as the unified provider split into two rival groups and pilots were brought in from around the world on much reduced terms and conditions. Under new legislation, anybody with a Master Class I certificate can train as a pilot, and is required to undertake only 15 passages of the Reef before being allowed to take charge of transiting vessels. Previously, only experienced ships’ masters were allowed to become pilots,which prompted many outsiders to slam the pilotage industry as being one driven by “old school tie” affiliations.While Mr Gamble concedes that there was an element of truth in this, he emphasises that the system worked and that the proof could be seen in the low level of accidents.
“Each of the vessels running aground in the post- 1993 era has been extensively investigated and each time a new set of recommendations has been adopted by the pilots. In a lot of cases, pilot fatigue has been blamed, which has also resulted in the introduction of strict guidelines covering this. In other cases, a lack of adequate training was identified, which was certainly true,” acknowledges Mr Gamble, who nevertheless concedes that a tightening up of procedures has marginally improved safety in more recent times. Nevertheless, this has been the result of the two, previously antagonistic pilot groups working closer together to improve standards, which have dropped notably as a result of the privatisation process.
“Shipping lines are now only interested in the price of the pilotage service on offer and have been known to switch provider merely to save A$100 (US$80). I am not exaggerating; this really does happen!” insists Mr Gamble, who points out that the break away pilot company, which employed inexperienced pilots, is where many of the more cost conscious lines migrated to, despite the fact that it was that company which had all the headline accidents.“Neither company nowadays provides a superior service to the other, so shipping companies go to wherever they can get the cheapest price,”he says.
He further points out that shipping companies simply don’t seem to realise that the whole jurisdiction process is overburdened with expensive, poor quality resources.“It is one thing for a company to profit from the reduction of pilots’ incomes, but nobody seems to be aware of the hidden, wasted costs resulting from having to maintain two sets of expensive resources, which are the result of personality differences between service provider staff. Indeed, to maintain over 65 pilots licenses servicing 4,000 vessels, there are over 50 personnel working ashore, 10 pilot launches and six helicopters ferrying pilots into just four boarding grounds. And the shipping lines think they are getting cheap pilotage!”






