First step taken to privatise Tug Malta

The process of selling the government's shareholding in Tug Malta Ltd has got underway, the Investments Ministry said yesterday. The government's shareholding amounts to 73.72 per cent.

Eleven highly reputable companies in towage and salvage operations have signed a confidentiality agreement with the Privatisation Unit and collected the Request for Proposals (RFP) document, the ministry said.

The RFP outlines what is expected in the detailed bids that these companies should submit for the acquisition of the shareholding.

Tug Malta was nationalised out of the private companies that used to run the service before 1980. Up to the late 1980s, Grand Harbour was the only shipping harbour in use on the island and as such the company had its tug fleet stationed there.

But, in 1989, with the development of the Freeport, the company had to invest in more tugs to offer an efficient service to tug users in the southern port. 

In the last three years, the company underwent a restructuring process to upgrade its service to provide, for the first time, harbour towage in Valletta and the Freeport on a 24-hour basis.

Operating and administrative expenses have been curtailed substantially since then. Last year, the tariffs, which were and will continue to be regulated by the government, were revised though they remained among the most competitive in the region.

This year, Tug Malta took delivery of two new tug boats. To be able to expand into international markets, it needs to continue to renew its fleet, the ministry said.

"This requires a substantial investment together with the capacity to take on the new risks of expansion into new markets," it said.

The government will be making further announcements on the privatisation of Tug Malta at the conclusion of future stages of the process, according to the ministry.