Opposition deputy leader Charles Mangion insisted yesterday that no company could guarantee a stable freight service to mainland Europe other than a company in which the government had a stake.
Speaking during a debate on the government's plans to privatise Sea Malta, Dr Mangion stressed that Sea Malta's services to mainland Europe were essential for Malta's foreign trade. Having Sea Malta replaced on such routes by a private company meant freight charges could rise, undermining Maltese competitiveness.
It was true that the government had signed a social obligation contract with Sea Malta, ensuring that the route to Sicily would continue to be operated for the next six years. But what would happen thereafter?
And, he observed, in explaining the government's plans to privatise the shipping line, the government had never given any assurance on jobs.
One could not come up with a privatisation process and ignore employees completely.
Dr Mangion said he had information that major downsizing was being planned, with the number of shore-based workers being reduced from 67 to 13, and the number of sea-based workers from 67 to 32. There was also a rumour that the government was already pinpointing certain people for certain jobs. It was also said that the Falcon would be sold and the service to Genoa stopped.
On a point of order, Public Investments Minister Austin Gatt said that was not the case. The government was selling Sea Malta as a going concern.
Dr Mangion said this statement would lead the workers' uncertainty to grow. For the buyers were not being bound in any way. What would become of workers who would be made redundant?
Why had the government decided on privatisation, when originally it had been thinking about restructuring the company so as to safeguard the public interest?
The private sector had a profit motive while the national interest included social aspects.
Dr Mangion said industry had repeatedly underlined the importance of Sea Malta and the need for it to continue to provide its service as this was important if the country wanted to expand its economy.
It did not matter if other European countries had a national line or not. The other countries were almost all on the mainland and their scenario was therefore different from Malta's.
Referring to the fact that the MV Zebbug had to be replaced, Dr Mangion asked if the government would be buying the new ship itself or whether it would wait for the new shareholders to make the necessary investment.
How would the government ensure that freight charges would not rise on the Sicily route?
Dr John Attard Montalto (MLP) said the opposition disagreed with moves by the government to dispose of its majority shareholding in strategic companies, such as Sea Malta.
The PN government saw as important the privatisation of Sea Malta even though it had a strategic role in the national economy. It was ready to sell its shares to a private company so that it could return the shipping line to profitability after restructuring, which would evidently involve dismissals.
The Opposition felt the government should retain its majority shareholding even if the company could not operate profitably. Its priorities were to safeguard jobs and working conditions and for the government to maintain control over essential services.
The government had a poor privatisations' record.
He felt it had not been wise for the government to have privatised Maltapost, which also provided an essential service. The government could have restructured this company without privatising it. Indeed, results achieved so far did not justify the government's decision.
As for the privatisation of Mid-Med Bank, one could not say that the presence of an international bank such as HSBC in Malta was negative. But the way the privatisation excerise was handled, including the sale price, were far from ideal.
If Sea Malta were to be privatised, he hoped the process would be handled far better than in the past. The government should not only seek conditions on the operation of certain routes, but also the future of jobs and working conditions, Dr Attard Montalto said.
Winding up, Dr Gatt reiterated that the government would sell off Sea Malta, not restructure it. No decision had been taken yet on whether it would retain a minority stake.
He reiterated that what was essential for the country was not Sea Malta, but the operation of freight services to Sicily and mainland Europe. The government had ensured this through the public service obligation contract it had signed with Sea Malta. Once the six-year term of the contract expired, it would be re-issued, because the governemnt was commited to the route, not any particular company.
As for the scenario of island states, it was worth pointing out that Britain, Ireland or Cyprus also did not have a shipping line.
It was far cheaper to subsidise the operation of the Malta-Sicily route than to restructure Sea Malta.
The government considered its social obligations from all aspects. Did the Opposition expect taxpayers to continue to pay for loss-making companies when there were viable options?
And it was worth pointing out that Sea Malta did not make social considerations in its charges on the Reggio route.
Dr Gatt said he could guarantee that the sale would be above board and would follow a public call and detailed talks. The government would seek the best balance between price and conditions, including the workers. It was, after all, the current government which had negotiated the generous collective agreement with the Sea Malta workers, including generous termination benefits running into millions of liri should, God forbid, there be terminations.
Dr Gatt said he was very disappointed over leaks when the government was studying its various options, made, it appeared, by people who wanted to preserve the status quo.
Sea Malta had lost Lm6 million in eight years, and this situation could not continue. Everybody should realise the realities it faced. This was not a company the country could not do without. What was essential for the country was the operation of services to Reggio Calabria and Catania.