Drydocks win $1m contract

Malta Drydocks has won a $1 million contract for the building of steel structures such as buoys, Economic Services Minister Josef Bonnici said in parliament yesterday.

He said he could not give further details until an announcement was made by the company concerned, but the contract had been won in the face of stiff competition from 'yards in Turkey and Croatia, among others.

Prof. Bonnici said Malta Drydocks was also competing for two major ship conversion contracts similar to the Ikdam contract it won last year.

Speaking during the budget debate on the Ministry for Economic Services, Prof. Bonnici stressed that everybody had to pull the same rope if Malta Drydocks was to succeed.

He said it had been somebody from within Malta Drydocks itself who had told a foreign organisation that a ship which had now entered Dock 6 on a $500,000 contract may be carrying hazardous waste.

This was something which did not result. It was a form of hindrance which could cost the dockyard valuable work.

Last year, Malta Drydocks lost two contracts on cruise liners after incidents on September 12.

The time when the dockyard was led by a clique was past and hindrance and political agendas were unacceptable.

Parliamentary Secretary George Hyzler, who spoke earlier in the same debate, said that the film industry was estimated to have spent $30 million in Malta over the past year. For the first time, the film industry generated activity throughout the year.

He said that next year would see filming on a $150 million co-production between Warner Brothers and a Maltese company, but the accent by Malta would continue to be on attracting small and medium-sized productions, including adverts and documentaries, which generated ongoing activity and employment.

Work would continue next year on the provision of better facilities, such as a sound stage, and there would be better staff training. The structure of the Film Commission would be reviewed.

Incentives would continue to be given to film companies on a case-by-case basis. Considerations on the granting of incentives included how many Maltese each production would involve and how much money would be spent in Malta.

Earlier in his speech Dr Hyzler spoke on consumer affairs, saying the past years had seen a radical reform in the area of consumer rights. Trade had been liberalised, bringing about greater product variety, and competition had brought prices down, as the telecoms sector showed.

A regime had also been set up to ensure there was fair competition.

EU membership would ensure that the prices of most of Malta's imports would drop because they would be bought from the EU. Furthermore, with regard to imports from third countries, negotiations had been held to ensure that prices would not rise. The balance, therefore, was substantially in favour of better prices.

EU membership would also ensure that consumer protection continued to be strengthened. Consumers in Malta would enjoy the same level of protection as in other EU countries.

The past year had seen government companies subject to the Competition Law, and operational and regulatory functions were separated, a decision which also benefited consumers.

The government had also introduced regulations on product safety, distance selling, door-to-door selling and food safety.

Dr Hyzler said market surveillance was carried out by a directorate whose staff had attended courses in the UK and Sweden. This specialised training had also been given to several other staff members of other directorates and the Malta Standards Authority.

There had been 70 cases where, following inspections, pharmacies were ordered to reduce prices of some products.

Parliamentary Secretary Edwin Vassallo, reacting to remarks by Dr John Attard Montalto (MLP), said a whole network of support services for industry, including SMEs, had been improved over the past four years. That was the purpose of the many authorities that had been set up. The success of those authorities was to be judged in the manner they served their clients. Their officials should ensure that they were not strong with the weak, such as small enterprises.

Support for SMEs was also evidenced in the incentives given in the budget and that of last year and new infrastructural services to industrial zones. A total revamp of the Ta' Qali crafts village was awaiting a development permit.

Other forms of assistance included the way civil service bureaucracy was being cut. The way trading licences were issued was being streamlined, although efficiency needed to be improved even further.

The government was also increasingly investing in education, particularly in MCAST, to produce the skilled workers which industry needed.

Mr Vassallo said the present government had breathed new life in the economy and the commercial sector, as evidenced by the way 3,600 jobs had been created.

The number of people in business was growing and investment was on the increase after having dropped in the two years of Labour government.

Exports in the past four years stood at Lm312.7 million compared to the Lm87.9 million in the two years under Labour.

In the past four years, the Maltese spent Lm13 million on travel compared to less than Lm4 million under Labour.

Consumption expenditure had risen by 13.7 per cent compared to 4.1 per cent under Labour.

Mr Vassallo said one of the benefits of EU membership for SMEs was that VAT would no longer be collected on importation but at the point of sale, thus improving cash flow for businesses.

Winding up, Prof. Bonnici said one of the major differences between the government and the opposition was that the government favoured competition, viewing it as beneficial to consumers. In contrast, the Labour government had given Maltacom a monopoly up to 2010. This government had liberalised communications and despite the opposition's warnings, new jobs had been created, the use of mobile phones had grown massively, and prices had come down.

Prof. Bonnici said the Business Promotion Act had yielded very satisfactory results, particularly as it had brought about an "explosion" of investment by firms which were already in Malta.

This law had been discussed in detail with the EU and an important principle that was recognised was that operating aid was permissible under ad hoc schemes because of Malta's particular circumstances such as double handling at the harbours.

Success, however, was also being achieved in new foreign investment. That included the opening in Malta of an Irish pharmaceutical firm being set up at Hal Far which would initially employ 120.

A Baxter subsidiary which had been heading for Singapore, Biodorme, was also persuaded to come to Malta and was setting up a factory at Marsa.

A recent significant breakthrough was the setting up of Lufthansa Technik Malta, a joint venture between Lufthansa and Air Malta to service aircraft. The indicators were that this enterprise could grow significantly in the future.

Another example of new investment was the partnership between Malta Drydocks and Palmer Johnson of the US on the use of one of the drydocks for the servicing of superyachts.

Prof. Bonnici said the Mosta Technopark, which used to be criticised by the opposition, was now full, and he wished there were two or three more estates of that nature in Malta.

In giving a round-up of extensions by various firms already in Malta, Prof. Bonnici said ST had added on 500 new jobs and invested Lm60 million. More developments in the research sector were expected to further increase the value added of the products made in Malta.

Prof. Bonnici referred to Dr Attard Montalto's remarks on factory leases. He said the leases were being adjusted because they were based on outdated construction costs, but they would still remain very reasonable. He could not see how investors who found the new rates expensive could really afford to invest.

Prof. Bonnici referred to Dr Sant's remarks about the retail price index for pensioners and denied that it was based on the new Household Budgetary Survey which was otherwise being kept hidden by the government. The Economic Survey said black on white that the index was based on the survey of 1994, not the new one, Prof. Bonnici said. The workings of the new Household Budgetary Survey were still in hand.

Dr Sant had also said that the MDC gave Lm500,000 in soft loans this year, less than half last year's total. Yet he knew well enough that the corporation now operated the soft loans scheme and an interest rate subsidy scheme. While the soft loans were really Lm500,000, a further Lm5 million were given under the interest rate subsidy scheme, which many industrialists considered more advantageous.

Prof. Bonnici observed that Dr Sant had criticised the merger of the MDC, IPSE and Metco to form Malta Enterprise, saying this would be a monster. Yet the opposition at the same time repeatedly criticised the government for setting up too many institutions!

Turning to GDP figures, Prof.. Bonnici said that after a revision of the balance of payments, it had been established that growth last year, excluding ST, was three per cent, not five per cent. This had nothing to do with the way the MLP calculated GDP growth last year.

Referring to pre-accession funds from the EU, Prof. Bonnici said it was clear that the freeze of Malta's membership bid by the Labour government meant that while Malta had since received @38 million in funds, other applicant countries had received twice that amount per capita.

EU membership would be far better than partnership, for a variety of reasons. Apart from the financial, other reasons were that Malta would be involved in EU decision-making, and it would be able to benefit from the 100 trade agreements the EU had. Among the other advantages of accession was that Air Malta would be able to benefit from open skies agreements throughout Europe, with no restrictions on the airports it could operate to.

Prof. Bonnici recalled that the opposition used to scare the people about the lifting of levies, yet the number of jobs had risen by more than 3,000 and investment since the lifting of levies had reached Lm180 million.

The minister said he agreed with Dr Attard Montalto that there should be better linkage between education and industry. This was being addressed through the Malta Enterprise and MCAST.

Referring to remarks by Dr Louis Buhagiar (MLP), Prof. Bonnici insisted that consumers would not pay VAT on gas and power. That would be totally absorbed by Enemalta, which would be compensated by other government measures.

Concluding, Prof. Bonnici said Malta was at a crossroads. The opposition wanted the Maltese to work behind high walls of protectionism, but the government was opening new horizons for Malta. Progress depended on how far Malta succeeded in embracing new opportunities, which opportunities would grow with EU membership. But if Malta stayed out of the EU, it would fall behind its competitors.