Sea Malta to be privatised

The government yesterday announced it intended to start discussions with the General Workers' Union and the Sea Malta shareholders with a view to privatising the national shipping line.

The government is the majority shareholder of Sea Malta, with 31 per cent of the company belonging to private shareholders.

It was therefore premature to say whether the government would hold a minority shareholding in the company in future, the Government Investments Ministry said in a statement.

Sea Malta Co. Ltd was set up in 1973 and has been operating as a commercial national shipping line.

The government has in the meantime signed a public service obligation contract through which Sea Malta committed itself to operate the Malta/Catania/Reggio/Malta route against a payment of Lm150,000 a year.

The government said it considered the route to be an important strategic one because it is a main source of importation for raw materials for local industry, among others.

Should demand increase, the route would be extended to the port of Salerno, the ministry said.

The ministry insisted that this contract was not some form of subsidy, but was a legal instrument, developed and accepted by the EU, to enable governments to ensure the provision of essential and strategic services to the private sector, even if these were not commercially viable.

This same formula was utilised by Gozo Channel to finance the subsidy for the Gozitan residents' fares and the elderly.

The PSO contract would remain in effect even under the new owners, the government underlined.

The transport of merchandise by sea has been liberalised for years and therefore Malta's EU accession would not have any impact on Sea Malta.

Rebutting statements by the Labour Party that the chairman and management of Sea Malta were not informed of any developments, the government said Government Investments Minister Austin Gatt held four meetings with the chairman and the government-nominated directors in the last year alone.

During these meetings, all options available to the company were laid on the table.