GRTU Publicly expresses its Grave Concern on the workings of the SMGB Smart Card System

The GRTU Malta Chamber of SME’s in representation of retail outlets who operate the Student grants Smart Card managed by SMGB is gravely concerned that the SMGB is using an attitude towards retailers which is not only arrogant and unacceptable in a country which is a member state of the European Union, but that verges on the abusive. This SMGB Board handles the 8 million Malta Liri a year in grants offered to students by the Government.

The GRTU Malta Chamber of SME’s in representation of retail outlets who operate the Student grants Smart Card managed by SMGB is gravely concerned that the SMGB is using an attitude towards retailers which is not only arrogant and unacceptable in a country which is a member state of the European Union, but that verges on the abusive. This SMGB Board handles the 8 million Malta Liri a year in grants offered to students by the Government.

Inspite of persistent demands by GRTU for a direct representation on the SMGB Board on behalf of participating retail outlets, a representative was never appointed to sit on the Board operating the Smart Cards. As a result the Board operates in complete disregard of retail outlets’ needs and the Board imposes unacceptable costs on retailers participating in the system.

The basis of the system as imposed without consultation by the SMGB, is in effect an increase of the price of all products purchased by students by 2%. In monitary value this equates to over Lm40,000 a year. SMGB has never consulted GRTU either on its operations or on its future operating plans.

Worse still contracts signed for a short period of time with participating retailers have in fact been extended with conditions which are worst than those originally contracted for. SMGB believe that they can impose this without hindrance as they are subject to no Public Regulator.

The SMGB Board has now announced that it is planning to introduce measures which they expect to result in a reduction in communication operating costs for both the Board and the reseller, yet the same Board is imposing a new fee on the reseller which in effect will turn the savings of the retailer towards a contribution that adds profits to the Board. It is incredible that a government nominated Board acts in a manner which is in abuse of acceptable commercial practices under EU fair Competition Regulations.

Furthermore the Board is also planning to limit Internet business payments to only one e-commerce portal managed by the same Board. This is not acceptable to GRTU. GRTU contends that e-commerce sites should be given free access to use the smart-card system immediately. A government that believes in fair competition should not invent monopolies and stifle competition.

GRTU fails to understand which Public Regulator has approved that the SMGB create a monopoly through the use of one preferred operator. GRTU sees no practical reason why a system of multiple operators competing to offer the best deal to students and resellers cannot be operated.

The GRTU furthermore insists that any equipment needed to offer a better service to Government should be paid for by the Board and not be imposed as a cost to the retailers. GRTU has information that various operators, including leading Banks, are interested to operate smart-card systems at a very low cost, or outright free of charge. This makes the SMGB imposed monopoly even more suspect.

The question comes up: why are the students paying for a service, which can be free?

And why are retailers being asked to pay for a service, which they are giving to the government?

The over Lm2million a year which are being transacted over the Smart Card system must be accessible to all retailers. Today there is no option to tap into this market except to sign the SMGB contract. The option is to stay out and lose the share of Lm2 million in business. So staying out is no option at all to the retailer. GRTU expects the Public Auditor and the Fair Competition Office to conduct a serious investigation of all SMGB operations. GRTU also expect Malta Communication Authority to view this proposed portal monopoly of SMGB.

GRTU strongly questions why the Chairman of SMGB Board refused to communicate with GRTU for months on end in spite of repeated representation by GRTU to Minister Dr Louis Galea, the Minister responsible for SMGB and then a meeting is called by the Chairman for all Smart System participating retailers to announce a development of a Scheme which not only does not address the complaints of retailers, but further adds to their burdens, stifle the choice to students, raises prices unnecessarily and benefits only the government. GRTU considers this as arrogance at its best.