Government evaluates expressions of interest for the dockyard

The government's call for expressions of interest in the privatisation of Malta Shipyards closed today and a formal statement will be issued tomorrow, a spokesman for the Finance Ministry said.

The call opened on August 11 and will be followed by a call for tenders in two weeks' time.

Before the formal call for expressions of interest was made, Finance Minister Tonio Fenech had said that 14 international entities, including American and Norwegian companies had expressed informal interest.

Prime Minister Lawrence Gonzi said yesterday that the government saw a good future for a privatised Malta Shipyards, adding, however, that unless the privatisation proposals were seen as viable for the shipyard’s future, the government would not continue the privatisation process.

The privatisation process has to be completed by the end of the year since no state funding of the dockyard is allowed after December 31.

The government’s stategy came in for criticism last week by EU Competition Commissioner Neelie Kroes, who insisted that state aid rules had to be respected. The EU is objecting to the government’s intention to write off the dockyard’s €100m debt before the company is transferred to new owners.

While the government has promised to submit new plans to the EU, more applications for the early retirement schemes were received – they reached 650 by last Saturday and topped 700 today.

Meanwhile, the Federation of Industry said the shipyard privatisation process had placed in jeopardy a number of potential contracts which were being discussed with Malta Superyachts and Manoel Island Yacht Yard.

"The government has encouraged all employees to take up the retirement schemes and this has meant that the shipyards will potentially be unable to meet any future commitments prior to the actual date of privatisation," the FOI said.

It said that although the government had been urged to retain essential staff until the date of privatization, nothing had happened.

"Unless action is taken the goodwill and contacts built up over the last six years will be lost and any new owner would effectively be purchasing assets with no goodwill attached. Worse still, the industry which supports many firms and a further 300 employees will suffer badly with no new work being taken for the 2008/9 season. For these reasons, the industry could take years to recover," the FOI warned.