As the seven year restructuring period for the Malta Shipyards agreed between Malta and the EU was coming to an end in 2008, it was reported that the European Commission had increased pressure on the Maltese government to declare the 'yards bankrupt and liquidate them prior to privatisation. It was clear that after seven years of "restructuring", the government still did not have a viable roadmap to revitalise this ailing sector.
This simply led to a formulation of a rushed plan to offer early retirement to the 'yard's staff and privatise the assets of the 'yards, rather than privatise a restructured operation as a going concern. The process was carried out rapidly with very limited consultation and this approach may have hampered the future prospects of a viable maritime engineering sector in Malta.
Most workers opted for the early retirement package in light of the generous package offered and comments made by the European Competition Commissioner while in Malta, which instilled little hope in the future sustainability of the shipyards.
The saga continued as the bids received from the privatisation process were described by the government as disappointing, while acknowledging some of the proposals as interesting. The government has now announced that it has asked bidders to reconsider their financial offers by June 20.
Months have now passed since the original bids were received and the public still does not have an idea of what type of options are being considered by the government. This situation needs to be rectified in light of the considerable amount of money invested by the taxpayer in the assets of the 'yards and on the redundancy schemes.
However, the most concerning matter is that all of this is being done in complete isolation from Malta's national enterprise and industrial policy. In November of last year I had written an article which focused on the importance of seizing the potential of Malta's maritime sector. I had emphasised that little attention was given to Malta's strategy for the maritime sector, which I believe cannot be divorced from the challenges which were faced by the shipyards.
There is no doubt that the implementation of the early retirement scheme may have reduced the potential to retain skilled and competent workers in productive maritime related jobs. However, notwithstanding the current impasse on the matter, I still believe that attracting strong maritime partners may still be possible and is critical for Malta's future development.
Notwithstanding the current budgetary pressures, I urge the government not to succumb to the temptation of accepting unfavourable "revised" bids which will not support Malta's long-term growth. It is now time to pause, reflect and engage with the constituted bodies, employers and unions with a view to define a roadmap for the best use of the Malta Shipyards' assets. The Malta Council for Economic and Social Development should be the forum where these policy debates are held.
This echoes recent proposals made by the Social Policy Minister to strengthen the MCESD with a reliable source of economic and social research.
Such an approach needs to be accompanied by a national roadmap for the maritime sector which will clearly stipulate Malta's ambitions in the sector and spell out the areas which we should focus on, and the skills and infrastructure required.
Once this is done, the government and Malta Enterprise can proactively target specific maritime niche enterprises to attract investment in Malta and utilise the infrastructure vacated by the Malta Shipyards.
In essence the assets of the Malta Shipyards may be transformed into a maritime business park which may include investors and entrepreneurs from businesses involved in ship, yacht and vessel repair, maritime equipment suppliers, financial, insurance and legal services for the maritime sector, maritime education institutions, non-polluting services for off-shore oil exploration and other related marine operations.
This will also require the government and Malta Enterprise to define an incentives and enterprise support package for the maritime sector. Notwithstanding common misconceptions, the EU does not prohibit such support, even to the ship repair industry, provided that such grants are assigned to research and development, new investment, new innovations and environmental friendly technologies.
This happens in Germany where the government provides support under tight conditions to shipyards.
If properly planned for, developed and incentivised, the maritime sector and the assets and infrastructure of the shipyards may become a strong pillar of economic growth, employment and prosperity.
Mr Mizzi is a senior programme leadership professional.