What the shipyards needed was to improve their efficiency and become truly competitive and not declarations which were aimed only at sensationalism and causing alarm, the ministry of economic services said yesterday.

The ministry was reacting to reports in the Labour maedia stating that leaked government correspondence suggested that the government intended to close down Malta Shipbuilding.

The ministry reiterated that the government's policy was to integrate the operations of the two shipyards. For this purpose the two shipyards had a common chairman and many management functions had been integrated. Action was also being taken for the workers in both 'yards to be given training so that they could be more flexible and productive.

At the same time intensive marketing aimed at attracting work for both 'yards was continuing. Serious problems had been encountered in efforts for Malta Shipbuilding to win contracts to build whole ships, particularly because of tough competition from Asian shipyards.

On the other hand, the possibility of winning contracts for the building of parts of vessels and steel structures appeared more viable, along with ship conversion and repair work.

This, the government said, was the position it was taking in the context of the EU membership talks.

The crux of everything was the need for change aimed at raising productivity and efficiency and the removal of everything that reduced flexibility so that the two shipyards could be more competitive, the ministry said.

The drydocks' section of the General Workers' Union on Wednesday instructed Malta Shipbuilding workers not to accept to be transferred to Malta Drydocks without the section's prior approval.

Section secretary Tony Coleiro said he had written to Economic Services Minister Josef Bonnici giving him a week to deny the reports that the shipbuilding yard was to be closed down.

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