Comino déjà vu

The privatisation of Malta Shipyards reminds me of the surrender of the lease of the Comino Hotel by Bical Controller Karmenu Mifsud Bonnici. The lease placed a burden on the leaseholding company, part of the Bical assets, of Lm12,000 per annum.

Returning the key to the landlord was presented as a gain by the Controller. No account was taken of the fact that hundreds of thousands of liri had been invested in the refurbishment of the hotel, that it could be run for profit or leased to third parties to create revenue. The key was simply returned to the landlord, John Gaul, who promptly contracted another lease for a fat premium and Lm50,000 per annum.

The only weighty objection raised to the privatisation of Malta Shipyards has been that of the GWU and that concerns the fate of employees. The GWU seems to be girding for battle as though in defence of the 3,000, Bical and Pace family enterprises employees without concerning itself with the issue of property or the administration of the Pace assets.

The problem is that with the PN moving in for the kill and the MLP acquiescing under the burden of its years of political exploitation of this reality, the GWU's noise and bluster becomes a fatal distraction. It feeds our anger at the maladministration but diverts it from the actual maladministrators towards secondary champions of the intolerable status quo.

If Minister Austin Gatt takes on the role of Karmenu Mifsud Bonnici in our remake of the Bical saga, we ordinary citizens have the unenviable combined role of the Pace family and the Bical depositors.

There can be no question that Malta Shipyards and its government-owned predecessors have gobbled up hundreds of millions of our money, significantly more than the Lm12,000 per annum and the hundreds of thousands of liri invested in the Comino Hotel refurbishment. We are invited to cut our losses with precisely the same logic used by the Bical Controller. Instead of the mythical bankruptcy of Bical (which has never taken place) to justify handing back the key, we have decades of astronomic loss-making by the state-owned enterprise to make us see red.

Great idea, hand back the Comino/Malta Shipyards key. Are we about to be stitched up just as the Bical depositors were together with the Pace family? Are we preparing to celebrate our release from the burden of subsidising Malta Shipyards by giving away our equity in it?

It all depends on the deal to be struck with the recipient of the key. One assumes the latter-day John Gaul will be asked to pay something. The question is how much? Anything? If I follow the government's reasoning correctly, it is attempting to write off a further Lm100 million of debts in order to make the enterprise attractive to the owner-to-be. On accession to the EU we had negotiated the striking off an accumulated debt of Lm400 million. That makes half a billion of our old money just vanishing. It makes the Comino affair look like a minor error of judgment.

Very well, so we plan to put a big rock on all that tax money and forget about it, but what about the assets of the enterprise, what are they worth? It must appear somewhere in the books as a valuation of plant and equipment. Five dry docks fully paid up? Goodwill? What of the workers skills?

What is it worth to a new owner in the real estate business or even to a new owner in shipbuilding and ship repair line who becomes the owner of Malta's mega-prime site? What is there to stop the new owner from cashing in on that Malta Shipyard asset just as the owners of hotels in prime locations have been allowed to transform them into residential units? Once the government has signed on the dotted line, the options are only the new owners'.

The recurrent justification for privatisation is the inability of the government to run anything with reasonable profit. It is tantamount to saying "I am a hopeless custodian of your assets so I am giving them all away. That way I cannot continue to inflict astronomic losses upon you".

None of us would accept this reasoning if we were the private owners of the enterprise and the government our administrator. Unfortunately, we are the public owners of it, the people who foot the bills, and lose out when the vanishing millions are not guarded and invested in education or healthcare, remote and absentee owners, disempowered and ultimately dispossessed. Is there no other way? Really?

The whole political class owes us an account for losses amounting to more than the equivalent of two Mater Dei Hospitals. Most of us are too distracted to ask for it.

Dr Vassallo is former chairman of Alternattiva Demokratika - the Green Party.

hcvassallo@kemmunet.net.mt