Shipyards privatisation process set in motion

Faced with a European Union deadline to stop state subsidies and with the company failing to break even, let alone make any profit, the government yesterday announced its decision to start the process to privatise Malta Shipyards.

Prime Minister Lawrence Gonzi said the government had decided to privatise this "asset" at a time when the demand for the service it offers is at its optimum and when the government is receiving several expressions of interest from companies wanting to invest in it.

Dr Gonzi steered away from pointing fingers or blaming anybody for the shipyards' constant negative results, be it workers, management or bad decisions taken in the past. He said pointing fingers was a "national pastime that never yielded any results".

He called for national consensus on the matter, saying that if everyone pulled the same rope and in the same direction, positive results would be achieved in the country's best interests. He was optimistic about receiving constructive criticism from everyone, including the opposition.

The government would make an international call for expressions of interest but would keep an open mind over whether it should be all or parts of the shipyards that would be sold. He believed the country as a whole would back the decision.

Dr Gonzi said the decision to privatise was underpinned by a basic principle: that the government should be the regulator not the operator of large companies like Malta Shipyards.

There were other privatisation decisions, which he described as having been successful for the country, including Mid-Med Bank, Maltapost, Malta International Airport, Bank of Valletta, Malta Freeport and Tug Malta.

The restructuring process, which started before Malta joined the EU, was reaching its end and, despite the subsidies and several efforts to make the company viable, Malta Shipyards was still making a loss and eating into the taxpayers' money.

Dr Gonzi said the privatisation process was a sensitive one because it involved the families of the workers there. In order to make the company more attractive for possible investors, the 1,700 workers had to be reduced drastically, although no figure was mentioned.

As had happened in the past, voluntary early retirement schemes will be offered but this, Dr Gonzi said, will be discussed in more detail during meetings between Finance Minister Tonio Fenech and the General Workers' Union, which represents the workers.

Communications Minister Austin Gatt said that every year over the past four years, between four and five companies expressed interest in buying Malta Shipyards, the most recent being in April, just after the general election. Most of them were European companies, especially from northern Europe, but there had also been interest from companies in Russia, China, Japan, Singapore and America.

Dr Gonzi said the government will be keeping the EU informed of all the details of the privatisation process and that, after receiving feedback, also from the GWU, he will be making a statement in Parliament and replying to questions on the matter. The privatisation process will be administered by the Privatisation Unit.

In its initial reaction to the announcement, the GWU said that, as a model employer, the government should have held consultations before deciding to privatise the shipyards. It will not accept any job losses and neither will it accept "arrogance" and "imposition". The plan it had drawn up, based on the Appledore Report (issued in July 1997) was still relevant and covered several aspects aimed at making the company viable.

Finally, the union said it will keep workers informed about developments, including what steps it will be taking.