Ship repair bidders asked for better offers

The three consortia that bid for the ship repair facility at the Malta Shipyards have been asked to increase their financial offers and improve their business plans.

Investment Minister Tonio Fenech told The Times that an assessment of the financial offers found them to fall below the levels that the government had been expecting.

"We told them we would not be considering their offers unless they were willing to reconsider them," he said.

Talks on the other three units up for sale - shipbuilding, the Manoel Island yard and the super yacht facility - were still underway as the offers were in line with what the government had in mind, he said.

But the bidders for ship repair have even been asked to rethink their business plans since neither were these to the government's satisfaction.

Mr Fenech said while it was preferable to sell the ship repair facility immediately, the government was willing to put the sale on hold if no acceptable offer was made.

"I'm not giving it (the shipyard) to them for free. I would rather keep it until they can afford to give me something better," he said when asked whether this was the right time to put the yard on the market given the current international financial climate.

Still, the government seems keen to sell the yard at the earliest, with Mr Fenech saying that the country could not afford to put it on the market after it has been closed for some time.

"People would have moved on to other jobs and we would have lost skills. It is not wise to postpone," he said.

The government has a professional estimation of what it should be expecting in return for the ship repair operation. "If we are not satisfied that the offer is close to this, we will seriously reconsider whether we should go ahead with the privatisation or not."

The government had set the privatisation process in motion last June when it had a looming December deadline to put an end to subsidies in conformity with EU regulations.

Although the first call for expressions of interest closed on September 15, there was disagreement over the process between the European Commission and the ministry, particularly over Malta's insistence to offer the shipyards exclusively for the maritime industry.

Late in October, a second compromise call was issued which retained that proviso but widened the offer to include all maritime sectors and not just ship repair and shipbuilding. The evaluation process started in February after 14 bids were received from consortia in Europe and Asia. Some of the bidders are composed of Maltese and foreign companies.

However, last April Prime Minister Lawrence Gonzi indicated on the television programme BondiPlus that he was not satisfied with the offers for the shipyards.