'Yard lost €30m on Fairmount job
Labour Party sees political responsibility for yard losses
The shipyards lost over €30 million on two major ship conversion contracts, according to auditors appointed by the government to investigate the controversial loss-making projects.
The Fairmount projects were acknowledged by the government last year as the main reason for the reversal of the progress Malta Shipyards had been registering since restructuring took place in 2003.
The Infrastructure Ministry, which published the 161-page report yesterday, said losses incurred by Malta Shipyards on the two disputed contracts showed that while the company had to diversify its activities, it lacked the necessary contractual, planning and productive abilities.
"Malta Shipyards... lacked the managerial structures and operational capacity to negotiate and successfully execute these contracts," the ministry said.
The negative experience, it added, showed that the public sector lacked the resources and expertise to take major commercial risks which involved public funds, especially in an enterprise where "political activism was part of everyday life".
The report's conclusions justified the government's policy not to have a direct interest in commercial enterprises, the ministry said, describing the Fairmount projects as the last page in a "long, sad story" of squandered public funds.
In its initial reaction to the ministry's statement, the Labour Party called on the government to shoulder political responsibility for the losses suffered by Malta Shipyards.
The PL pointed out that two days ago the Infrastructure Ministry had defended its role in the running of public entities according to government priorities.
"By the same yardstick the government had the duty to ensure the shipyards followed its priorities, which in this case were to give the company a viable future," the statement said, insisting that when the contracts were awarded the government had boasted that it would be a turning point for the company.
In a separate statement the GWU said it was studying the report but expressed its dismay that the investigation was conducted by a company chosen by the minister.
It reiterated its call for a public inquiry into the two contracts.
ksansone@timesofmalta.com