A working group explored options for developing the fairway dues system

A working group of the Finnish Ministry of Transport and Communications reviewed options for developing the fairway dues system and assessed the need to revise fairway dues legislation.

"Lower fairway dues could be introduced within a reasonably short time frame. However, based on the findings of the working group even a more comprehensive review of the fairway dues system would be possible later on", says Merja Kyllönen, Minister of Transport.

Preparations for a comprehensive reform of the system are also a part of the Ministry's work on Maritime Transport Strategy, which will be completed by the end of 2013.

Long-term and short-term measures

Fairway dues are used to cover the expenses incurred to the State for providing maritime services. It is the working group's view that the current Fairway Dues Act is on a sound basis and no extensive amendments to the Act are needed.

The working group estimates that small adjustments to the current system will be sufficient to correct the isolated defects, whereas larger-scale structural changes would require more extensive measures.

The annual cost-effectiveness of fairway dues is significantly influenced by two factors: traffic volumes and severity of the winter. The costs may vary greatly from one year to the next. This is why the working group considers that fairway dues should be examined as an average of several years, for example at three years intervals.

The working group proposes that icebreakers be exempted from fairway dues whenever they are providing ice breaking services to the Finnish Transport Agency on the basis of treaties or contractual obligations. In the current system, the operative use of icebreakers may at times be inappropriate because they try to refrain from paying the fairway dues.

According to the working group, problems related to fairway dues of cruisers and vessels carrying bulk cargo could be removed by reducing their fairway dues. This could be achieved by lowering the maximum dues for bulk cargo and cruising vessels. This would especially benefit large vessels.

For example the unit price of fairway dues paid by vessels carrying bulk cargo of minor value is high, which is considered to reduce competitiveness and trade. It is not profitable to transport raw material of minor value to Finland for further processing or to export such material or products abroad.

High fairway dues are also regarded to limit the number of cruising vessels, and thus tourists, arriving to Finnish ports, which in turn reduces tourism receipts.

The working group also examined economic implications of the tightening of international regulations on environmental impacts, especially in terms of sulphur and CO2 emissions. The group came to the conclusion that there is no need to link the fairway dues system and environmental impacts of vessels.

The proposed measures would reduce central government revenue by around 5-6 million euros. The working group made no estimate as how to cover the reductions in revenue.

Further information
Mr Tuomo Suvanto, Senior Adviser, tel. +358 295 34 2403
Mr Pekka Kouhia, Senior Government Adviser, tel. +358 295 34 2612