AUDIT SERVICE FOR FERRY COMPANY WITH GREECE - SHIP WAS HALF EMPTY, BUT THERE WERE NO TICKETS - CALLS FOR REMOVAL OF DISTORTIONS THAT DAMAGE THE STATE - Filenews 2/4 by Charalambos Zakos
The Audit Office is calling for a change of course regarding the policy of the Shipping Deputy Ministry for the ferry connection between Cyprus and Greece through its special report, which was made public today, Thursday.
It is recalled that Scandro Holding Ltd is the company that undertook the contract and operates, during the summer season, 22 routes from Cyprus to Greece round trip.
In particular, based on the findings of the Audit Office, it is found that the incentives given by the state and the guaranteed compensation from the non-sale of tickets are essentially a disincentive, according to the Audit, for the company, in terms of the completeness of the ship carrying out the Cyprus-Greece ferry trip and vice versa. In fact, as the Auditor General, Andreas Papaconstantinou, adds, low occupancy may also result in lower operating costs for the company, implying that this is in its interest, especially since it is reimbursed for tickets.
Tickets with a half-empty ship are sold out
The Auditor General's foreword gives the picture gained by the Audit Office during the audit of the ferry connection between Cyprus and Greece, with the findings showing serious distortions, both in the booking system and in the pricing policy of tickets.
According to Mr. Papakonstantinou, while there is a particularly high travel interest for travel with the line - indicatively, sometimes tickets are sold out as soon as the platform opens - however, the average occupancy for the period 2022 - 2025 was only 49%. Given that the ship has a maximum capacity of 350 passengers, this means that the average occupancy of the ship for the years 2022-2025 was at 49%. That is, while 61,600 passengers could have been served in the four-year period (maximum number), 30,459 passengers were finally served, notes the Audit.
In fact, the paradox, as the Auditor General adds, is that during the inspection, cases were identified where there were no tickets available, however the occupancy of the ship was at 69%. A similar finding emerged for the transport of vehicles, since while the reservation system did not show available tickets, the ship travelled with an average vehicle occupancy of only 18%. On the routes checked by the Audit Office, while at the time of booking the system had zero availability, an average of 64 vehicles were transported per route, i.e. there was, in essence, availability of 75%-89%.
The Audit Office also makes special reference to the reservation system itself, which, according to Mr. Papakonstantinou, allows wrong practices, giving as an example that a traveller can travel alone in a four-bed cabin at a lower price than if he booked a single room. He also adds that the reservation system, due to weaknesses, does not present a true picture of availability, a point that reinforces the aforementioned about the sale of tickets, while there is availability.
Another point that is directly related to the above is the fact that, contrary to the practice followed by almost all companies related to travel, ticket reservations for the ferry connection can be cancelled at any time without any charge or "penalty", which can lead to seat reservations, which are finally cancelled at the last minute and cannot be replaced by other interested parties. To all this is added that the pricing policy followed remains the same, even during periods of higher demand, since ticket prices are the same whether it is May or August.
The amount of the subsidy is a problem, says the Audit Office
The Auditor General notes that the plan to support the ferry line must continue. However, he emphasizes that an immediate re-evaluation of the incentives and compensations to the company is necessary, saying that the amount of the subsidy is close to 93%, while it could be lower.
Specifically, the company receives €5.47 million as guaranteed compensation per year and an additional 6% on ticket sales. However, these seem to act as disincentives to efforts to increase occupancy on routes. It is worth noting again that the lower the occupancy, the greater the financial burden on the state.
Indicatively, the state for the period 2022-2025 has paid the company a total subsidy of €20.4 million, as follows:
- 2022: €5.208.952,76
- 2023: €5.211.755,35
- 2024: €4.847.054,78
- 2025: €5.171.317,62
