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Gibraltar’s maritime sector – its financial importance today

Gibraltar Magazine – July 2015
Ian Le Breton

As we approach the hottest months of the summer, inevitably thoughts turn to lazy days on the beach or by the pool. In my last column, I discussed how – despite assumptions based on our Mediterranean location – Gibraltar does not shut down for the summer. Far from it, in fact: the summer is a busy time for business. A good example is that the Gibraltar government is gearing up to host Maritime Week, which culminates in a conference from 8-10 July – more of which later, and indeed elsewhere in this edition of The Gibraltar Magazine.

An obvious benefit of living in Gibraltar is that nothing is ever very far from the sea. No one living here can escape our maritime heritage and a quick glance at a map would demonstrate all too clearly the strategic importance of the territory down the ages. The Rock guards the northern side of the Strait of Gibraltar (please, the name should never be in the plural, although just saying “the straits” is fine) and enjoys a commanding view of one of the world’s busiest sea-lanes. Its formidable outline is a landmark for anyone sailing into or out of the Med.

The Gibraltar Squadron and its patrol launches, HMS Scimitar and HMS Sabre, ensure the security and integrity of British Gibraltar Territorial Waters and, while the former naval dockyard is now operated as a commercial facility by Gibdock, Gibraltar’s is still an important base for NATO. British and US submarines frequently visit the Z berths at Gibraltar.

But leaving the navy aside, let us consider the private sector’s contribution to our maritime industry. The Port of Gibraltar welcomes vessels of all kinds year round and we can all gawp admiringly at the pleasure yachts in our marinas. But is the maritime sector’s impact on our economy truly appreciated by the general public? Apart from the visible activity going on at the Port, a significant proportion of the financial and legal business conducted here is centred on matters maritime. Are we taking the right steps to exploit these opportunities?

Let’s begin at the “smaller” end. Our marinas are visited by, or are a permanent home to, a truly diverse collection of vessels. This ranges from tiny motorboats and sailing boats, through to the smaller and mid-size yacht level and up to an impressive list of visitors in the “superyacht” bracket. True, there is some argument as to how to define a superyacht but you can assume a length of at least 24m. By way of comparison, a cricket pitch is 20m long. These days, a growing number of such vessels far exceed this criterion. Sometimes they are referred to as “mega” or even “giga” yachts; I prefer to think of them as just seriously big.

In the past I have written about how we might go about attracting more of these magnificent floating palaces (with or without gin!) to visit and encouraging them to stay longer. And not just skippers and crew, but the owners too. Once a yacht is here, owners can fly direct into Gibraltar in just a few hours from the US or Middle East, as well as Europe.

Don’t be fooled by those naysayers who tell you that the runway is too short. Our brand new terminal building has a purpose built Business Aviation Wing with its own entrance and dedicated security processing facility, while the Wessex Lounge offers business facilities, meeting rooms, board rooms and private lounges. The more challenging bit, of course, is to encourage these wealthy individuals to visit us in the first place. Step forward my colleagues in the wealth management business!

There are several ways in which Gibraltar can benefit from the yachting sector in particular. Local registration provides a Red Ensign jurisdiction that offers a tempting combination of “Britishness” at competitive prices, together with impressive turnaround times. At present there are some 800 yachts on the local register but, of course, there is plenty of room for more.

Significant as they are, pleasure yachts form only a small part of the local maritime sector. Looking at the wider picture, cruise liners and freight are also a vital part of the equation. Cruise ship visits have been fairly stable over the last five years at around 180 ships per year. The general trend is that these behemoths are becoming ever larger so the number of passengers disgorged on to the Rock should grow year on year. Let’s welcome them.

The most important of all, however, in “bunkering” – the process of supplying operating fuels to ships – which generates a major source of local revenue and employment. Gibraltar is a world market leader and bunkering accounts for a very high percentage of the calls made into the Port of Gibraltar. Readers may care to look at the excellent piece in the recently published Gibraltar Chamber of Commerce’s Annual Report 2014 on this subject.

The Chamber’s report reveals that last year there were some 8,500 calls into the Port of which some 5,500 vessels were here primarily for bunkering. It is estimated that up to 75,000 ships transit the Strait of Gibraltar annually but only 50% actually call into the bay of Gibraltar and, of those, only 30% come to the Port. So clearly there is scope for developing this business.

We face stiff competition in this area. Not least from Algeciras, just across the bay. The same can be said for other areas within the maritime sector. Readers who are interested in these fascinating figures might also check out the Port Authority’s website at www.gibraltarport.com. Aside from useful empirical data there is also an interesting photo gallery that might encourage any budding ship spotters.

The three-day Gibraltar Maritime Conference 2015 is mentioned elsewhere in this edition and it promises to be an excellent opportunity for everyone involved in the sector. An impressive line-up of speakers has been invited and a good social programme has been arranged. The fine facilities on board Sunborn, the conference venue, will be combined with other impressive locations across Gibraltar. This will provide the delegates with opportunities to network and learn for themselves the benefits that doing business on the Rock can offer – across the maritime sector and, hopefully, beyond.

The conference itself is divided into three sections, each taking up a full day. “Ships” and “Seafarers and Crew” will occupy the first two days, followed by “Super yachts” on day three. The not insubstantial costs are being borne by the Gibraltar government together with a number of commercial sponsors but the financial benefits accruing in the longer term should outweigh this initial “spend” many times over. Gibraltar Maritime Week, together with other international initiatives like last year’s trade visit to Hong Kong, are just the kind of promotional support that business needs in this global age and it clearly demonstrates that the government sees a role beyond policy and legislation. I extend my best wishes to everyone involved in this event.

The potential yield from our maritime sector does not stop at the supply of goods and services to the vessels themselves. Their owners and crew offer a potential market for legal insurance, payroll, investment, healthcare and pensions services – all of which can be provided locally. The financial benefit to a small territory such as Gibraltar should not be underestimated.

Gibraltar has a long and distinguished maritime history and a name with global recognition. We are now in a prime position to exploit that collateral. Regular readers know that I am more passionate about things that fly rather than those that float but I might just dust off the binoculars and do a bit of ship spotting myself this summer. I would encourage those businesses in Gibraltar that may not have considered the maritime sector in the past to do so. There is plenty of business to be secured. See you down at the Port.

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