The future Sea Malta faces

Personally, I do not consider "privatisation" a scare word. Indeed, I think there are many positive aspects associated with it. Nevertheless, I cannot concur with those who consider it as some sort of cure against all economic woes and a necessity. Surely, it is not a measure imposed by the European Union but rather a policy decision of the different national governments.

Some people seem to mistake liberalisation for privatisation. To "liberalise" is to open up the markets to competition. On the other hand, privatisation is the process by means of which a state-owned enterprise is sold either to the public - at one point Thatcherites started calling it "popularisation" - or to a private entity. The European Union pushes for liberalisation but does not impose privatisation.

Malta's experiences with privatisation in the recent past have not been something to write home about. HSBC got Mid-Med Bank at what many still consider to have been a discounted price in a deal about which they must be really happy. The bank has not kept up to its promises when it comes to opportunities for its employees abroad and has steadily reduced social and local considerations in its decision-making process. On a positive note, HSBC has introduced clearer and more stringent procedures.

The present government also privatised Maltapost with arguably disastrous results which have already been thoroughly commented upon. At the same time, the part-privatisation of Malta International Airport has not yet yielded the sort of value added which was hinted at the time of the sale.

We are now hearing about the privatisation of other enterprises, namely Bank of Valletta and Sea Malta. Today, I will comment on the second.

I will not mince my words. The sale of Sea Malta goes against the national interest. The national sea carrier has a crucial role in our economy which cannot be measured solely on the basis of company profits or losses. Its most important role is that of securing a link for the business community with mainland Europe. An analysis of the market during the past years shows that a number of private companies have come in and out of the market sparsely and at intervals. Nothing wrong in that since they are guided almost uniquely by their concern for profitability.

Sea Malta could not and cannot operate solely on such a rationale because it has public obligations to satisfy. There were instances in the not-so-distant past when Sea Malta operated trips which were not commercially viable for the enterprise but which were extremely important for our economy. It is indeed one of the life lines of our economy.

One could argue that even if the company is privatised, it would still have to abide to a public service obligation contract. The government would still pay for the implementation of such an obligation. I do not think this is enough. The sum paid by the government is way too low. I am not that confident that any private operator will not try to use the maximum permissible "flexibility" not to abide in the way Sea Malta is doing.

One has also to take into consideration the national carrier's role in fostering a supply of trained and skilled seamen. I do not think that any private enterprise would endeavour in such a proactive role in training locals. Indeed, there would be a far greater possibility that such a company could eventually phase out the services of these local specialists. The short-term repercussions are obvious. In the long term we would end up with a depletion of this type of specialisation.

It goes without saying that the financial results of Sea Malta could be better. Nevertheless, this is not a sufficient justification for privatisation. Furthermore, the way in which the government is tackling the issue is further demoralising the company's committed workforce.

Everyone must be on board in order to save the day.

Mr Muscat is a Labour member of the European Parliament.

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