Editorial

Malta's shipyards have never been able to steer clear of financial trouble ever since the General Workers' Union brought the enterprise to its knees when, in what was generally seen as an over-generous helping hand to the Labour Party in its bid to rock the boat for George Borg Olivier's government, it kept an overtime ban going for seven months. That was 37 years ago. Since then, no government has been able to put the shipyards on a sound financial footing.

Of the many reform programmes launched over the years, including at the time of a socialist government led by Dom Mintoff, none has worked. Perhaps the biggest experiment, direct workers' participation, then seen as a key to a possible turn in the shipyard's fortunes, did not deliver the goods either. One main reason for this, at least as seen by most, was, and still is, an ingrained culture of dependence on state aid.

As the European Union does not allow subsidies to uncompetitive industries, a last attempt to bring about a reversal of the situation was launched in 2002. At first it seemed as if the new efforts were going to work, but they did not, with one minister saying only some time ago that productivity had now reached the lowest level since 2004. Only recently, The Times wondered if it was reasonable to expect the 'yard to start making a profit by the end of the year when it failed to do so in the seven years allotted for its restructuring.

The government has now answered this question through its decision, announced by the Prime Minister on Wednesday, that it plans to privatise the shipyard.

In other words, the government believes the shipyard would not break even and sees privatisation as a solution to its long-running problem.

The writing has been on the wall for years and it is time for the country to face facts.

Fact number one is that the yard's financial haemorrhage is far too heavy. Another is that, so long as the enterprise remains in government hands, it is next to impossible to remove the culture of dependence on state aid. True, some progress might have been made in the restructuring programme but the point is that productivity remained low and there does not appear to be any prospect of a sustained improvement.

Other factors can be given in support of7 privatisation but surely the best is that the enterprise, or whatever parts of it are to be privatised, will stand a better chance of becoming financially viable in private hands than if it were to remain the state's responsibility.

When so many reform programmes have failed, it will be wrong on the part of the Labour Party and of the General Workers' Union to oppose privatisation.

They may have a point in criticising the government for not consulting them before actually taking the decision to go for privatisation, and indeed, the government could have made its intentions clear earlier. Still, with subsidies having to be stopped by the end of the year, it is surely in the national interest to see how best the 'yard could be kept operating and, more importantly, to start contributing to the economy rather than remaining a financial burden.