Government plans to form two new companies

The government is planning to form two new companies to replace the current set-up at the two shipyards, sources said yesterday.

One of the companies, Malta Shipyards Ltd (MSL), will continue to run the shipyards with a whittled down workforce while the other, Industrial Projects and Services Ltd (IPSL), will take up the two 'yards' 900 surplus workers.

Malta Drydocks Ltd and Malta Shipbuilding Company Ltd will be dissolved.

After lengthy and painstaking negotiations, the government last week reached agreement in principle with the General Workers' Union over the new set-up and the union will now submit the agreement to the shipyard workers for their approval.

Under the government's plan, early retirement and voluntary redundancy schemes will be offered to employees of IPSL. Those who do not take up the offer could be seconded to government departments, local councils or the private-public partnership projects. They could also be seconded to the private sector, but only voluntarily or after consultation with the union.

All of them, however, will retain their current working conditions, including the seniority they enjoy and the right to return to IPSL if the job they are seconded to is terminated in future.

Four schemes will be launched, similar to the ones offered two years ago. A retirement scheme on a two thirds pension will be offered to those aged 56 and over. Those aged between 50 and 55 will be offered a lump sum equivalent to 15 weeks' pay for every year, and could opt for a two thirds pension when they reach 56.

Those aged between 40 and 49 will be offered an ex-gratia payment equivalent to 3.25 times their current basic salary, capped at Lm17,000. Those under 40 will be offered eight weeks' pay for every year of service capped at Lm12,000 for those with more than 15 years service or Lm10,000 with less. A minimum of Lm5,000 has been established.

It is expected that the schemes will cost the government over Lm7 million.

The government will write off the shipyards' debts, which amount to Lm310 million, so that both companies will start off with clear balance sheets. The government will take back the land at the Marsa shipyard, including the dock, and the Number One dock in Cospicua in return.

A formula has also been found to give a wage rise that meets the General Workers' Union's aspirations, the sources said.

Two collective agreements are expected to be signed next week. One will be between the GWU and MSL, the other between the government or the management of IPSL and the GWU.

A technical meeting between the union and shipyards' management lasting some six hours took place yesterday to finalise the draft agreements.

The union is convening meetings for shipyards executive committees and delegates tomorrow when it will explain the agreement painfully negotiated with the government.

Sources said there were mixed feelings among delegates over whether to approve the agreement, with some saying the union was rushed into it and others arguing that the union could not have done more in the circumstances.

The government has repeatedly warned that it was prepared to take the decisions that needed to be taken over the shipyards.

Although there was a faction of shipyard workers who were advocating taking to the streets, others were sceptical about such tactics, which they feared could turn public opinion even further against them and allow the government to close down the shipyards once and for all.