Editorial

On the same day last week that The Times carried the General Workers' Union's call for an inquiry into the way a ship conversion contract was handled at Malta Shipyards, the newspaper also published an insight into the situation facing Croatian shipyards as the country prepares for membership of the European Union. Croatia takes 1.5 per cent of the global shipbuilding market but, according to the report, its five shipyards are all in debt and they now face restructuring or closure before the country joins the EU. Like the shipyard in Malta, Croatia's shipyards depend entirely on state aid.

Wars in former Yugoslavia and the loss of their traditional Russian market are given as two of the main factors that led to the debt-ridden shipyards. But there were two other very important factors that kept the shipyards underwater, as it were: Mismanagement and resistance to reforms. In fact, the report says the industry was the bastion of resistance to reform.

Well, this is hardly of any consolation to Malta and its shipyard. If anything, it confirms the harsh reality of the market: If you're not competitive, you're driven out, unless you're subsidised. But the EU does not allow subsidies to uncompetitive industries, which is why an attempt was launched in 2002 to save the industry from closing down. This took the shape of a restructuring programme, one of many carried out at the 'yard over the years since its conversion from a naval dockyard to a commercial shiprepair yard.

Though there were times when the prospects for reform looked good, none of the programmes led to turning the yard into a financially-viable enterprise for good. Over time, the yard had good and bad managements but at least two of the main reasons for remaining unprofitable were resistance to reforms and politicisation of the work environment. Not even Dom Mintoff, at the height of his power in government, or the workers' direct involvement in the running of the dockyard were able to turn the 'yard into a profit-making enterprise.

Sharing the blame with the workforce for this are the management, the GWU and successive governments. It is a shame that these could not, collectively, find the common sense required to make sure that the 'yard moves ahead in a sharp competitive environment, away from direct or indirect political influences that have done so much harm to its financial well-being. Picking up the pieces will not be easy now and, as time inexorably moves forward to the end of the time-limit allowed for the 'yard to become commercially viable, it takes no clairvoyant to predict that the parties involved will once again start drawing daggers at each other, as the GWU and the ministry responsible for the shipyards are doing now. These may continue to spar to their hearts' content over the ship conversion contract in dispute but their quarrel will not stop the clock from ticking away.

If the yard has not been taken out of the red in the seven years allotted for its restructuring, is it reasonable to expect that the required reforms can be carried out by the end of this year? Many would say no and are likely to immediately suggest privatisation. But let's say, for the sake of argument, that the EU would be prepared to grant an extension to the time-limit, if requested, and as suggested by Alfred Sant before the general election. Would it be possible for the 'yard to make it? Again, sceptics would say no, and it is not hard to understand the reason for this.

The question is: Would it be worth the effort to make a last-ditch effort to save the 'yard? If the players involved say yes, and provided the EU agrees to an extension of the time-limit, then they would each have to genuinely keep to their commitment.