Updated: Government to start dockyard privatisation process
The government is to start a process for the privatisation of Malta Shipyards, Prime Minister Lawrence Gonzi announced today.
He made the announcement at a press conference.
Dr Gonzi called for national consensus on the issue. He said that between four and five companies expressed interest in buying into Malta Shipyards every year, the most recent being in April. Most were from North Europe but there had also been interest from companies in Russia, China, Japan and America.
He said the government would issue an international call for expressions of interest but would keep an open mind over whether it should be all or parts of the shipyard which would be sold. Talks would be held with the EU and the GWU.
There was no doubt, however, that the workforce would need to be reduced. Talks would be held between the Finance Ministry and the GWU so that a reduction of the workforce could make the sale of the shipyard more attractive. New early retirement schemes were a possibility.
Communications Minister Austin Gatt said he believed this was the best time to launch the privatisation process, given market conditions, and he believed the country as a whole would back the decision.
The process will be administered by the Privatisation Unit.
The Prime Minister’s announcement is the latest twist in the long and tortuous history of the shipyards in Malta. Originally conceived as a military ship repair yard, the shipyards in Malta turned commercial following a decision taken by the British colonial government in 1959. The shipyard was transferred from the admiralty to the management of Baileys (Malta) Ltd.
Amid losses and industrial unrest the dockyard in 1963 was entrusted to a Council of Administration formed of the British and Maltese government. Swan Hunter managed the shipyard without success for five years and in 1968 the shipyard was nationalised.
In 1975 the management of what was now known as Malta Drydocks was transferred to a management council elected directly by the workers.
Profitability was rare however. As problems mounted the government again assumed direct management of the shipyard in 1997 and in 2003 Malta Drydocks and Malta Shipbuilding were dissolved and replaced by a new company, Malta Shipyards, with its workforce reduced to 1,700 from 2,600. The excess workers were transferred to government departments or local councils.
Since 2002 the government has invested €825 million (Lm354m) in the dockyard.
A total of €700 million (Lm300m) in debts accumulated over the years were also written-off with the reorganisation and €124.4 million (Lm53m) were provided to the company in operating aid, training grants and capital subsidies.
Direct state subsidies to the shipyard are due to stop at the end of this year, as agreed in the EU accession talks.
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N.Aquilina
Jun 23rd 2008, 10:52
Good Morning,
Attention Mr. A. Cunningham,You haven't been doing your homework!
Re. Your comment "Because when others were found sleeping during working hours while their company was sinking with the velocity of light we were working to pay their sorry jobs and we paid to the tune of 300 million!!! "
Quote taken from news on the Internet: "the workers found to be asleep on the job had been overworked. Indeed, GWU reported that management had contravened the EU working time directive (Directive 2003/88/EC), as these employees were requested to work for 16 straight hours."
Good Day
eric saliba
Jun 20th 2008, 23:52
niether mr martinelli nor mr gauci cunningham replied to the fact that fenech adami had boasted that the problems at the docks were over....or was this another untruth?
re the rest of your answers, in my opinion you are beating about the bush. the docks are not the only entity costing the country millions so why just pick on the docks, or more specifically, the yard workers. in a serious company where there are similar losses the heads of the top people are the first to roll.
dominic zammit
Jun 20th 2008, 23:43
Albert gauci cunningham.......have some respect , we should always show solidarity between workers, and be careful before we insult others when speaking bluntly. All the fault you could find in dockyard workers some were caught sleeping at one time or another. Jesus sad once those without a sin cast the first stone.Did you ever think about their sacrifices and contribution to the maltese society including politics finacialy and trade unions. I have an advise for you try to see what you can learn from them since you are trying your best in trade union, good luck .
effie carbonaro
Jun 20th 2008, 20:09
eric saliba as already indicated by tony borg there are more entities the government should set its eyes on and start privatisation.these too are costing thousands of liri to keep and they don't give back anything.
Joe Martinelli
Jun 20th 2008, 19:42
@ Eric Saliba
As a know-it-all, since you labelled me that way, may I argue that the reason for not entertaining any of the offers before now was because of the agreement (with the GWU's assent) of the seven year restructuring plan which ends December 31 2008. Can you imagine what the GWU would have done if the yard was privatized before the agreement ended?
There were only one or two contracts which resulted in losses recently and I believe that the bankruptcy of a sub contractor contributed to the loss. Management had nothing to do with the situation.
Some workers will opt for early retirement packages, most will be re-employed by new owners and the rest will be found a job in the private sector - SmartCity and elsewhere.
What has loss of life got to do with 'sleeping on the job'? What exactly is your point? Are you justifying non-competitive working practices?
Re: your reply to AGC - Of course loss of life is tragic. As tragic as being hit by a car, falling from a height, blown to bits at a fireworks factory, falling down the stairs......
A.Gauci Cunningham
Jun 20th 2008, 19:05
..........there are no words to describe the pain, anguish and loss of the families of those nine people who lost their lives in the late nineties tragedy but Mr.Eric Saliba what does that have to do with the other cases of workers found sleeping??..............The majority of the people are not angry at the workers because they were found sleeping but because unlike the majority of us if found sleeping no Union member will defend us.......they should have at least been given a warning.................i think privatisation will mean business and anyone who wasn't working efficiently (whether Management or worker) will have to pull up the socks
eric saliba
Jun 20th 2008, 14:59
just a few questions to the prime minister./pn apologists
if there were 4/5 expressions of interest every year as you said why wasn't something done before?
did you check why contracts were always made at a loss? in a serious organisation when things go bad the first head to roll would be the CEO .
if downsizing is a prerogative to privatisation why were workers told before the election that their job was safe with gonzipn? ( another lie??)
hadn't your predecessor boasted that he had put more money in the docks than the labour govt and that the problems there were now over??(yet another lie?)
@ mr gauci cunningham. why are you so spiteful of dock workers? you mentioned people sleeping on the job? and the ones who lost their lives there while earning a decent wage for their family??what about them? shame on you. i bet you work in some comfy air conditioned place !!
tony borg
Jun 20th 2008, 14:30
well done mr gonzi.after you have privatised the docks you can turn your attention to and do the same with the government departments and start downsizing the surplus of govt employees by offering the same incentives that you are giving to the docks working.everybody must keep in mind that lots of these workers are a burden on the Maltese taxpayer as the dock workers and for them too a solution must be found as to make everbody realize that the government isnt a charitable institution.lots of govt workers are the same as dock workers.they go to work just to be present
michael catania
Jun 20th 2008, 11:28
i get tired of these conservatives who are forever blaming the blue collar workers for all the financial problem with the Dockyard. Probably they are the usual know all thrash that believe what their masters tell them by means of radio 101'
I think I can speak on this subject as I had a number of years experience working both in maltese Yard and overseas ones.What you know alls should realise is that the worker can only be as good as the tools and machinery provided. I had the opportunity to visit the dockyard and as soon as I walked in the Machine shop I EXCLAIMED IN HORROR that the place is a museum place. It was not much different anywhere else.
tHE WORKERS WAGES ARE ONLY A SMALL PART OF THE OVERHEADS. So the question is where is the rest of subsidies going. I can only guess. This dockyard is full of unproductive hanger ons. S o all you know alls lay off the the workers as they certainly don't have two hour lunches and other tax free benefits.I may also point out that the Maltese dockyard is well appreciated for his ability to perform efficiently in other overseas dockyards.
Joe Martinelli
Jun 20th 2008, 01:03
May I suggest that the Painters' Section of the shipyards get a few workers to scrape the rust off the metal roofs of various sheds in the 'yard and paint them in order to make them more presentable to any prospective investor? See picture above.
As the old saying goes: putty and paint make the devil look a saint.
JOHN SCERRI
Jun 19th 2008, 19:47
1) There is no mention in this article of by how many the workforce needs to be reduced and from which sectors these workers will be reduced.
2) There is no mention as to whether other government sectors will be inspected in order to identify any needs which will require taking in and training workers from the shipyards.
3) There is no mention of whether an Operational expenditure audit report and a Capital expenditure audit report has been carried out to identify which of the two is the show stopper.
4) Workers in the shipyards are mostly in the middle age bracket since the last recruitment was carried out in 1987 approx. 20 years ago.
Many are middle class average wage earners with families and children.
It is most important for Government. , Opposition, All trade unions not just GWU, The Federation of industry and other major NGOs to gather around a table , share and discuss what options lie ahead to saveguard these people's job security.
The past will only help not to repeat mistakes but will not help provide the solution.
Charity begins at home - Now is the time to make it happen. Priority: Urgent & Important
Raymond Sammut
Jun 19th 2008, 19:10
Sorry to have jumped in like this, Mr Costigan, right in the middle of your "tip of the iceberg" contribution. I hope I haven't screwed it up for you. You was doing extremely well with your elaborate explanation. I think what you mean to say to Dr Muscat is this. Minimise management both laterally and vertically, downsize/upsize/re-skill workers, pipe politics down the gurgler, cut the nonsense, no more promotion suckering, and get on with the job.
A.Gauci Cunningham
Jun 19th 2008, 19:04
JOE GALEA-----Did I ever say that there weren't millions wasted on Mater dei? Or that the St.Paul's Bypass didn't cost too much and took longer than exected???.........I ( and the majority) aren't happy with all the waste but at least we can console in the fact that if ,Godforbid, anything happened to me or my family we can use Mater Dei......and when we drive from Birzebbuga to Cirkewwa we drive on some of malta's nicest and best built roads!!!...............what have I, my family or the country (at least in these last years) gained from the Shipbuilding.........nothing....zilch!!
..................its not the Pn ""fogged"" (eeeehhh?!?) mind which wrote the blog but the mind of those too fed up of seeing a lame duck draining money out of our coffers to accept any lame excuses from those who should be the last to speak about the Shipyards!!!
Joe Martinelli
Jun 19th 2008, 18:27
A. Daley is no banker! He claims that 'Labour used to loan the money not be given as gratis'!
How does one go about lending money to someone who does not earn one cent and being 'on welfare'?
Will A Daley ever stop making a fool of himself in defense of the MLP? When would it have been a more convenient time for the shipyards to be privatized or shut down? What does the EU have to do with Malta squandering money subsidizing an ever losing entity?
The Nationalist government decided to do something about the situation now and not years ago is because now we can afford to find a job for any redundant workers as opposed to a few years ago when jobs were scarcer.
Well done Dr. Gonzi. The timing is perfect. Any redundant workers from the shipyard will surely find work in maintenance related work with SmartCity coming on stream soon.
Renato J . Costigan
Jun 19th 2008, 16:43
C O N T I N U A T I O N..............
after that the foreman and so there will be the need of a manager.
So instead of only 3 workers there is another 5 workers plus a chargeman/
foreman and manager. A total of 8 workers instead of 3. Waste of money in
overtime.
Most of those 900 workers where skilled workers and for most of them
the Drydocks paid for their skills. I NEVER AGREED with the government for the
way he accepted the assessment made by the managers and the management.
The worst had to come afterwards. After all those redunduncies most of
the managers were awarded by a wage increase and for many with more than
one PROMOTION. In fact there was a department were a chargeman-like was
promoted to manager and his manager had two promotions were there is only
24 workers.
So lets be more concious about the situation at the Malta Shipyards.
IT IS NOT THE WORKERS FAULT BUT THE MISMANAGEMENT
I always said it and I keep on saying it. I hope that somebody realise this
situation. This is only the tip of the iceberg.
Raymond Sammut
Jun 19th 2008, 16:40
@ Alfred Farrugia
Are you sure it was "chicken"? From what I can recall, it was something related to "bocci". It was a grand post-election public speech (1971 I think it was), but so what? Il-kbir had known all along that there was no other way for him how he could feed all those men and their families. He was good at using them, but that's all. He had neither vision nor solutions. He was a stinking politician and a poor economist. In the long run they ended up using him at the expense of everyone else. Of course there are top workers at the dry-docks, and there will always be. Dry-docking has been in Maltese blood since time immemorial. But that's the point. The GWU will never rid the MDD from deadwood. Let's hope Dr Muscat can stand up to them and do the right thing. Give these genuine dry-dockers the chance to work hard and to show their mettle without having to carry someone else's luggage.
Renato J. Costigan
Jun 19th 2008, 16:18
To all those that have written about the Malta Shipyards (Ex-Malta Drydocks).
With respect to all.
None of you said a single truth.
As an Ex-Malta Drydocks employee I would like first of all to go back to
November 2003, when 900 workers were redundant from there.
Unfortunately I was one of them. From all that number only 2 managers
were made redundant. Why I am saying this? Because the main reason
why the dockyard went so much bankrupt was not the fault of the workers.
The blame has to go to the management and their managers. The ex-
chairman knew what was happening there especially when it was
amalgamated with the ex-Malta Shipbuilding. Some of the managers there
were given promotions in the management especially the post of the Human
Resources (created instead of the Personnel Department).
Now let's come to the part of the managers. I begin from the part
concerning the overtime. None of the workers stay overtime if not ordered.
So when a manager is ordered to leave workers on overtime, if there is the need
of 3, he makes a total of 8 so that there willbe the need of a chargeman...........
Joe Galea
Jun 19th 2008, 11:12
@AGC - have you ever commented about Mater Dei and the huge millions dished out because of the government incompetencies, corruption within, etc? Aren't we also paying for that?
However the point of MLP is not opposing privatisation but the bulldozer way the PM is doing things without consultations. So try to put aside your blue fogged mind and try to be objective once in a lifetime.
F.Cilia
Jun 19th 2008, 11:05
Shame on you ppl likeMr. Demarco & Mr. Vella, MDD workers, have always worked hard to
achieve the best for Malta. Had this not been so, no shipping company
would bring its ships to our Dockyard. Of course we own them, we should be thankful for all
the hard work done by the MDD workers, for the time they spend away
from their families and for the times they risk their lives. Everyone
should be concerned about these people's future and it is immature to
instigate their dismissal from work.
Joe Galea
Jun 19th 2008, 08:46
@Joe Vella et al ...those who are claiming that privatisation is the solution to dockyards due to the workers' incompetence and lack of accountability and so on.
Then let's privatise this government as it is the Incarnation of incompetence, money wasting, unaccountability, etc etc.
joe Vella
Jun 19th 2008, 02:25
@ A, Daley
the Maltese public doesn't own any thing ti the Shipyards workers. Enough money have beeb flushed down the drain.
Can you imagine whta services the Government could and shoud be able to offer to all of society with th emoney saved form dishing out at the Shipoyard.
The only regret is that it wasn't done sooner.
Joseph Galea
Jun 19th 2008, 01:05
The privatization of the Dockyard will be successful if those concerned with their livelihood at the yard change their attitude.
A private enterprise is only in business to make money, they have no time for the nilly willy moaning of unions or slackers.
The serious enterprise will not hesitate one moment if they see that there is no money making opportunity for their investment and will close the doors at a moment's notice.
Having said that, private enterprise looks intently at what they are getting into and will do anything within their power to make it a success.
But for this success, they will need the 'honest' co-operation of everyone involved, be it the workers, their union or the political parties.
A.Gauci Cunningham
Jun 18th 2008, 22:32
And how we're enjoying it Mr.Daley!!!!! because unlike you we believe that as we work our a** out everyday and pay our taxes to the cent the same should go for others!!!!! Because when others were found sleeping during working hours while their company was sinking with the velocity of light we were working to pay their sorry jobs and we paid to the tune of 300 million!!!
Of Course we're happy Mr.Daley....we're happy to see that finally someone seems to have taken the bull by the horns and going to do the thing most of us wanted to see.............because at last everyone from management to the workers have to work for their money and make their entity productive...........because at last noone will be able to abuse of the workers for their own political agenda..........
.......thats why we voted PN....because we want a PM that takes action and puts money where his mouth is.......because I don't want to pay anymore for the status quo of failure..........because its time for change in the MDD....because the MDD is a BUSINESS not a Kazin Socjalista funded by taxpayers.................if you don't realise this than you know nothing about the what makes a Nationalist tick!!!!!!!
Albert gauci Cunningham
Jun 18th 2008, 19:31
clara pace-------don't start misinforming-----------privatization doesn't mean loss of jobs ( although some of them will be given a voluntary retirement scheme) it means business, it will hopefully mark the end of Malta's biggest white elephant and the start of a more profitable yard.................The time of the aristokrazija are now well and truly over..................Thank you PM for not throwing any more money in the Shipyard..........the majority is four square behind you
..
A Daley
Jun 18th 2008, 19:22
First of all let us not be arrogant and say that (at long last this problem is going to be solved). Tell it to the workers that earn their living to feed their children.
Questions will remain:
Why is it that PN timed the closure of the dry docks for after joining the EU, with the excuse that the Government cannot subsidise after December of this year?
Why is it that after EFA had made the biggest mistake in his political career and pumped 8 million a year into the dry docks and saying, that at long last the dry docks problem is now solved. He even used to boast that PN is pumping more funds into the dry docks then Labour ever did. Labour used to loan the money not be given as gratis.
Why is it that PN did not close the dry docks well before 2008?
As I have always predicted, PN wanted to join the EU at all cost ,so that they will have something and someone to blame for their mismanagement, lies and deceit.
Another bunch of workers taken for a ride! Now for all those that believed Gonzi (Id-dry docks safe f'idejna). Enjoy!
Alfred Farrugia
Jun 18th 2008, 17:32
37 years ago, I was at Castille with other trade union representatives when the newly elected Prime Minister, Dom Mintoff, informed us that the workers at the shipyards were right to make the best of the situation under the British, but then – in 1971 – it was no longer correct to pick the feathers of our own chicken, because the shipyards had turned into the Maltese government’s hands. Apparently Mintoff’s words fell on the deaf ears of the GWU, not to mention those of the workers themselves.
I still believe that this important industry should be saved, but it is a pity that the GWU and the Labour Party have used the shipyards for political ends for all these years. Now seems to be the time for real change and a new beginning, if the GWU, the Labour Party and the government together with the workers pull the same rope, before it would be too late to do anything more.
Alexander Morana
Jun 18th 2008, 16:15
I remember when the Vietnam war was finally over I saw a cartoon printed in a North American newspaper with Henry Kissinger telling a State department employee to close the account. The Malta government should have done this long time ago, instead of pumping over 300 million Malta pounds into a bottomless pit.
It's about time too and why now? I wonder who would want to invest in a dead industry which not only will have to pay for the purchase of the enterprise but will have to pump millions more on re-training the workers and investing in automated high tech machinery, which eventually will be run with less the number of the present number of workers.
EDWIN DE MARCO
Jun 18th 2008, 14:51
At long last the dockyard issue might be solved, although I do not agree with another early retirement scheme at MDD as this will surely involve hundreds of thousands or millions of euros. If I remember well the minister concerned has already given an early reitrement scheme in the past & said it would be a one-off thing. So much for promises... I never imagined the government would go back on it's word! It certainly is not fair on other Maltese workers who might end up without a job through no fault of their own & who surely won't be given a golden handshake for jeopardising their own workplace & wasting so many millions forked out by Maltese taxpaying voters.
Carmel Said
Jun 18th 2008, 14:51
About time that the country got rid of this white elephant. The shipyards have cost the country over 600 million liri over the years all of which came out of are taxes. It would have cost less to close the whole thing down and give out unemployment benefits for all these years.
clara pace
Jun 18th 2008, 14:49
during election campain shipyards workers were told that no one was going to lose his job.again this was one of the pack of untruths that dr gonzi told us.
E.Magri
Jun 18th 2008, 14:36
"Since 2002 the government has invested €825 million (Lm354m) in the dockyard."
Therefore it would have been cheaper if in 2002 all 2700 employees were told to stay at home and still be entitled to a LM200 weekly pay check for these last six years.
The government (tax payer) would have saved some LM200 million.
Charles Camilleri
Jun 18th 2008, 14:30
Given the history of the yard, it seems that this is the only sensible solution save of closing it because of insolvency.
Manuel Mifsud
Jun 18th 2008, 14:19
Great News! The Government is showing that it was more than prepared to continue administering these islands for the next five years. Smart City, the rent reform and now the dockyard privatisation process. Keep it up Dr. Gonzi.
A Farrugia
Jun 18th 2008, 13:49
This bankrupt yard, thanks to so many stalwarts from the GWU, should have been closed long ago. But as they say thank you for small mercies. At least now the people of Malta will not continue to subsidize a flogged donkey. And the Government did well to remove this black spot from his mission. It should never have been taken over by the Government. And in Mintoff's time, the only small recorded profit went to the pockets of the workers and the Maltese nation saw nothing of it. I hope the new labour leader will not support the GWU or the workers in this privitisation bid. I hope he keeps malta's and the citizens' interests first and foremost.
Alfred Cassar
Jun 18th 2008, 13:46
Nice move. Privatisation is the only solution and in the long run it will be beneficial both for the Maltese people and for the workers themselves.
Steve Said
Jun 18th 2008, 13:42
At long Last!!!!!
Keith Chircop
Jun 18th 2008, 13:39
At long last.
Joseph E Briffa
Jun 18th 2008, 13:23
Privitisation seems to be the only way out. The drydocks will be restructured when it falls into private hands andl workers' conditions and wages would be revised. It was ridiculous that workers were pampered and were taking home inordinately high wages when the drydocks was making losses and €1.5 billion euro were paid by taxpayers to make good for these losses. It's impossible for the drydocks to make losses on practically every job. Obviously the system of management couldn't be right. Wages must have been too high and a number of workers were not delivering. The GWU must be blamed for this situation; the Union obtained very good conditions and wages for the workers, but never wanted to budge when the situation worsened and the drydocks could not compete with other drydocks in the Med; the Union always insisted that the workers' conditions would not be touched. The situation continued for far too long but could not last forever. Perhaps the new owners could consider utilising the knowhow and expertise of the workers for the construction of Wind Turbines. Let's hope that the GWU would act in a responsible manner and put the interests of the workers before partisan interests.
Matthew Tabone
Jun 18th 2008, 13:10
This excercise should have been done many years ago when a Norwegian company way back in 1995 wanted it on the condition that it retains half of the workforce! We could have saved €1 billion. If the privitisation excercise also fails...................CLOSE IT DEAR GOV ONCE AND FOR ALL because the Drydocks was always a huge social burden on our pockets. That money down the drain could have been invested and not wasted on an outdated industry!!
Mario Borg
Jun 18th 2008, 12:58
The dock workers are in for a very rough ride, mainly as a result of the constraints imposed by EU. No big wonder the GWU and MLP, which historically view the docks as their birthplace, took the stand they took vis-à-vis EU accession some years ago.
yanica mizzi
Jun 18th 2008, 12:42
Good thing! It couldn't cope not even with government help and all the subsidies given were a waste of money. Government had no other choice.