MARAD clarifies Cabotage exemptions

– grant for right to operate sea, air, or other transport services provided for by law

The Maritime Administration Department (MARAD) of the Ministry of Public Works, in a Department of Public Information (DPI) news release, addressed what it described as the “glaring untruths and misconceptions about the article published on the popular social media platform, Facebook, on Saturday, February 15, 2024.”
According to the DPI, Marad noted that the publication, which falsely alleged corrupt practices on the part of the Senior Minister of Public Works, and/or the management of the MARAD, was grossly misleading and downright mischievous.
The Ministry categorically stated that the grant of cabotage exemptions is provided for by Section 10 of the Guyana Shipping Act, and is not a clandestine process as was erroneously suggested.
While in Guyana, cabotage is exclusive to Guyana Flagged vessels, exemptions are allowed and are based on a thorough assessment of the circumstances or justifiable reasons presented by the applicant.
Additionally, these exemptions are issued with the strictest terms and conditions attached, in the interest of maritime safety, safety to the marine environment, and maritime security.
All vessels to which these exemptions apply are subject to rigid port state inspections, which include inspection of the hull and machinery, and statutory documents to ensure compliance with established local and international regulations, the release noted.
According to Marad, the grant of cabotage exemptions is not a whimsical undertaking, as cabotage is a measure of protection for the local shipping industry. However, consideration is often given to the unavailability of local Flagged vessels and the legitimacy of the operations for which cabotage is requested.
Upon applying for the grant of cabotage exemptions, foreign registered vessels are required to pay an administrative fee that is fully accounted for by MARAD.
From 2022 to late 2024 there was an exponential increase in the demand for vessels (particularly tugs and barges) to transport sand and aggregates in Guyana. This was driven by a myriad of construction projects underway, including the Gas-to-Energy (GtE) Project.
Local vessel owners did not possess the capacity to meet this demand. Thus, at the request of companies, several foreign registered vessels were approved to operate domestically during this period.
Also, during this time, many Guyanese companies invested and purchased several tugs and barges, and they are registered in Guyana: thereby increasing local capacity and causing lesser reliance on the use of foreign vessels.
Further, cabotage exemptions issued to foreign Flagged vessels are of a temporary duration, usually for a single voyage or for short periods, but not exceeding one year.
It is also important to note that the exemption to which the article mischievously alluded has expired, MARAD concluded.
According to the Clarksons’ website, cabotage is the name given to the transportation of goods/passengers between two places in the same country by a transport operator from another country. In a shipping context, cabotage refers to transporting goods/passengers between two ports or places within the same country by a vessel registered in another country.