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Some Ferry Prices Freed and Government Incentives for New Ships

Government last month said it would provide ferry operators with incentives to renew their aging fleets, and that it would liberalize ticket prices for ships sailing out of the Port of Piraeus, all in an effort to improve the country’s ferry services.

Merchant Marine Minister Manolis Kefaloyiannis said that his government is to allow coastal shipping companies to obtain loans at preferential rates to buy new vessels since about half of the current fleet will have to be withdrawn from action by 2008. Greek law since 2001 does not allow ferries that are more than 30 years old to sail.

“This way, we will be able to introduce new ships to subsidized lines and achieve an improvement in the quality of services to passengers while providing an unhampered connection between the islands and the mainland,” Mr. Kefaloyiannis said.

In July, Greece secured a loan worth 3 billion euros from the European Investment Bank (EIB) to regenerate its ports, but the minister said that this money would help free up capital that will be made available to the ferry operators to improve their service on unprofitable lines.

The loans will have to be paid back over 25 years. The first seven years will be interest-free, while the interest for the remaining years will be fixed at a low rate of 2 percent.

The government subsidizes the routes to more remote or unpopular destinations. The minister said that his ministry would sign five-year contracts with companies in this respect rather than the current one-year deals. He said this would allow the ferry firms to make more long-term plans.

Mr. Kefaloyiannis added that the government intended to free up the pricing of tickets for ferries leaving from the port of Piraeus. It has already introduced a pilot scheme for ships leaving from Rafina, Lavrion, Elefsina and Kymi and there is pressure from the coastal shipping companies to allow them to be free to charge prices as they see fit.

The announcements came after the ministry fined a number of ferry companies more than 500,000 euros in total for a spate of delays and cancellations. Some 85 percent of all ferry passengers on Greek domestic lines travel during the summer period.

The minister rejected claims that the fleet of ferries operating in Greece was not modern enough. He said that Greece had the lowest average age of ferries anywhere in the EU.

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