Mark Micallef and Herman Grech
Rush for shipyard retirement schemes
Photo: Darrin Zammit Lupi.
Scores of dockyard workers have applied for early retirement schemes after an EU Commissioner said last week that the government's intention to write off about €100 million in debts before selling Malta Shipyards violated EU rules.
The Sunday Times has learnt that over 650 shipyard workers have now applied for the schemes - 250 in just two days - after European Competition Commissioner Neelie Kroes' comments during her visit to Malta.
The international call for expressions of interest in Malta Shipyards closes tomorrow.
When contacted, Finance Minister Tonio Fenech said that the Commissioner was merely reflecting the delicate process associated with the shipyards' privatisation.
"We were never threatening anybody... we were merely echoing what the Commission was saying. There isn't much room for manoeuvre and we're really at the 11th hour," Mr Fenech said. In line with the EU treaty, the government cannot continue to subsidise the shipyards after December.
The minister said he had no doubt that the agreement reached with the General Workers' Union last week erased some of its doubts over the schemes. The government and the GWU agreed to top-up the retirement scheme fund on offer by a further €9 million.
The highest number of applications so far - 220 - was for Scheme C for those aged between 40 and 49.
Moreover, the two sides agreed that should the shipyards' buyer have a problem with the number of workers left on the company's books after the schemes expire, the government and the union will form a joint commission to seek alternative employment for the excess workforce.
The government said it believed to the 1,600-strong workforce should be reduced to at least 700 before the privatisation process is initiated.
The size of the workforce also has a bearing on the position of the European Commission. Ms Kroes warned the government last Wednesday against accepting a cheaper bid in which bidder offered to take on more workers.
"In that case, the Commission is likely to view that sort of transaction as having an element of state aid," a government source said.
But the workforce is certainly not the only stumbling block. During last week's meeting, the Commissioner's team made it clear that the EU's problem with allowing Malta to waive the shipyards' remaining debts was that it could set a precedent at a very delicate time.
On one hand, there are thorny ongoing negotiations between the EU and Poland over the fate of three shipyards, which centre precisely on state aid, while on the other there is the issue of Italian national airline Alitalia.
"There is a similarity between Alitalia and the Maltese shipyards because the Commission does not want to give the impression that state aid can be given in the context of privatisation," the government source said.
The Commission's primary concern does not relate so much to the possible imbalance which the yards' debt could create in the shipbuilding industry, but the billions tied to a similar deal in the case of Alitalia.
Just yesterday, a privately-driven plan to rescue the crippled Italian national carrier was again on the verge of collapse after a week of talks between unions and investors hoping to take over the airline ended in deadlock.
In the circumstances, competing airlines, particularly those from the EU's bigger states, such as Lufthansa, Air France and British Airways may have a lobbying interest in preventing the EU from allowing Malta to waive the remaining debt for fear that the Italian government may use the case to obtain a similar arrangement.
Everything will depend on the final package which the government is expected to present in November after it has considered the bids made for the shipyards.
Meanwhile, the Nationalist Party yesterday accused Labour of politicising the shipyards' privatisation issue. The PN said Labour attempted to take credit when privatisation plans were going well but was quick to change its tone when problems cropped up.
On Friday, the MLP said some of the problems were evident at an early stage and could have been avoided had talks started earlier and had the necessary measures been taken in terms of the accession agreement.
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14 Comments
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Joe Galea
Sep 16th 2008, 08:24
@Tonio Galea: It seems that the PN is treating this wound with acid. MLP couldn't contribute to this issue as PN obviously refused as most probably they didn't want to show their huge mess and if it went right they wanted all the credits. But for the PN things didn't go right as they don't know anything about EU rules, though they have a lot of well-paid EU gurus. So blamin MLP for the MDD mess reflects the low IQ level you people have. Remember who was in government for the last 20+ years.
I assure you that Labour's internal affairs are being soundly mended and wheels are set into motion. You will see in the very near future, a stronger, more united Labour Party...unfortunately for you and your blind-folded fellas.
Joe Galea
Sep 16th 2008, 08:14
@John Abela: Regarding discos and communism, yes communism fell but discos remained till today, so who said that was not wrong but half right. Moreover, be informed that dockyard workers gave their day of work working many times in dangerous situations. So all this venom against these workers just shows your one track mindedeness. Also, remember that this government has been in power for almostr 25 years. So who is to blame for the current state of affairs in this country especially at the Dockyards? How many promises have we heard through times that this enterprise would be turned into a viable one by the PN GURUS to win some votes? The Dockyard situation is another blunder by the PN Government, like the Sea Malta and so on and so forth.
C Camilleri
Sep 15th 2008, 22:17
I don't think it's fair that the 100 million euro dockyard debt be erased or that large sums are given to compensate workers for redundancy and the latter get to keep this money even if they are re-employed by the new dockyard owner. This is all money that taxpayers have had to fork out with great sacrifice. So many families are facing hardships to make ends meet and to pay some of the highest taxation rates in Europe. I feel that we taxpayers need to make our voice heard about this injustice. For me what matters is not whether the one doing wrong is PN or Labour, but that whoever is in government, once and for all stops squandering taxpayers' money so as to woo the vote of certain groups.
Pauline Barbara
Sep 15th 2008, 13:12
@ Tonio Galea
Labour internal affairs are being sorted and how?? You can choose to believe what you like, but the wheels of change within the Labour Party have been set in motion. However it would never be in any PN apologists' interest to admit to this now would it????
I'm afraid we'll never know whether MLP could have contributed towards solving the problem which is MDD as PN refused MLP's offer to confront this national issue together for the good of the country.
What we do know for certain is that PN had plans since last year about a potential privatisation but left discussions and the setting up of a business plan till just a couple of months before any subsidies have to come to an end (due to them wanting to win the election) - and now said business plan is not good enough and PN have to set up a new business plan, whilst finding the right buyer all in the space of 3 months.
I support Labour but I hope that PN can sort this mess out in the best interest of the country.
Tonio Galea
Sep 15th 2008, 11:52
I'm just a taxpayer so I'm just glad that this wound is being treated. I think that any comparism done by Ms.Kroes between Alitalia and Malta shipyards is totally wrong and that she's just bloathing the issue. I also do not believe that any MLP leader can give any valid contribution in such a major issue they cannot even solve their party's internal disaster.
Chris Borg
Sep 15th 2008, 09:16
Many have been suspecting what seems to be unfolding little by little.
Soon the government will claim that they found nobody interested in taking over the drydocks and will have to sell the property to land developers in order to try and balance the losses.
Are we psychic or what???
J Farrugia
Sep 15th 2008, 09:03
It seems that first the MDD workers did not want these schemes and now they're doiing like the naghag ta' bendu. Because that's what the GWU told them to do. Apply. And further millions from our pockets and from the poor into these lazy workers' pockets. This government has lost its soul. It will be the MLP to reap all these benefits.
Bertu Cassar
Sep 15th 2008, 09:02
Abigail, I would also add that the money received from the sale of the shipyard would go for the retirement schemes. Therefore the 58 million would definately be less.
Kullhadd jaf iparlu u jispara fil vojt, imma meta tkun f'dik is-sitwazjoni tkun taf x'jigiefiri.
Joseph Ellul
Sep 15th 2008, 01:08
The PN should ask the european airlines to donate to the maltese government some money towards the MDD workers. Get Mr. Berlusconi to pay war damages to the MDD and the EU to help give redunduncy pay to all the MDD workers. It seems that since Mr MIntoff cut our balls the MDD employees cannot perform a good days work. So give up the ghost and let the shipyard take a rest.
Pauline Barbara
Sep 14th 2008, 23:12
When did Labour ever try to take credit for the privatisation plans, Joseph Muscat just confirmed that MLP were in favour of privatisation but the interest of taxpayers and MDD workers had to be taken into consideration. Joseph Muscat also offered PN to be part of the discussions as this is a national issue and not a political one - now we have PN accusing MLP and Joseph Muscat of politicising the issue when they know full well that is not the case and I would say the majority of the population sees it the same way.
So according to PN, MLP should not comment at all on what the EU Commissioner stated regarding governments business plan - the whole country is talking about it, but because MLP state that had discussions started earlier, these problems could have been forseen or sorted out earlier; MLP are accused of politicising the issue??
So MLP can't voice their opinion 'cause PN will rush into rampant accusations???
Abigial Spiteri
Sep 14th 2008, 16:11
@ M Pace
"This is not only Ironic but simply goes to show what poor political strategists we voted for"
I assume your option would have been AN/AD then right?
Surely you will not tell me Labour , am I right?
Re: Dockyard:
PN proposed early retirement schemes + privatisation = EUR 58 million (once).
MLP proposed transfering workers with IPSL (government) = EUR 40-50 milion annually...so...at least 400 million euro until the next election.
what was your reaction to that?
John Abela
Sep 14th 2008, 15:56
@M. Pace.
Hold your horses. Finally, there is now light at the end of the tunnel. The conventional wisdom in the 1970s told us that discos and communism would be around forever. In the 1980s communism self-destructed. It is now accepted that state entities that are unproductive and unprofitable should go. I am happy to pay a few million euros more and to solve the problem once and for all. The workers know they will have to give an honest day's work if the dockyard is privatized. That is why they are falling over themselves to sign for the early retirement schemes. As with Alitalia and the Polish shipyards, workers all over Europe are realizing that the reason they go to work everyday is to work! I have paid a lot of taxes to successive governments over the years only for the politicians to then squander on the dockyard. At least my children will not have to. Imagine the number of schools, roads, and other infrastructure we could have got with 100 million euros!
Mary Pace
Sep 14th 2008, 13:30
This is a sacrilege!
This Government promised a legislation of Accountability, not more squandering of public funds. Is this how the Nationalist Party solves it's problems by throwing away millions in early retirement schemes ?
The Drydocks are financially dry, and as happened in various sectors in the past who became uncompetitive and inefficient, should declare itself redundant without the Goverment and taxpayer having to shoulder the burden of this National disease we have been subsidising for decades.
The Goverment's declaration to absorb the Drydocks debt comes at at a time when the nation was made to carry a 95% surcharge on utility bills which the Government could not sustain.
This is not only Ironic but simply goes to show what poor political strategists we voted for!
martin saliba
Sep 14th 2008, 12:34
it will be interesting to see how many of the 650 will apply to be boarded out.