The Leader of the Opposition has challenged me to state who is politically responsible for the Fairmount losses. I have no hesitation in answering that if you look beyond your nose the political responsibility falls squarely on the Labour Party, the General Workers' Union and the party militants who were employed at the shipyards and always considered the shipyards as "il-benniena tas-Soċjaliżmu" (cradle of socialism), which rather than producing ships produced the infamous "suldati tal-azzar" (steel soldiers). Some political responsibility falls as well on different Nationalist administrations for having failed to come through earlier with the privatisation of the shipyards, although I fail to see the political possibility of doing so prior to 1996 while the 2003/2008 Administration was rightly focused on joining the European Union.

It was this Labour core group of militant workers that led to the final scuppering of the shipyards, although the writing had been on the wall for years. Their militancy always found the support of the PL and the GWU with both organisations considering the shipyards as a strategic political tool rather than a commercial entity.

There is also little doubt that management could and should have negotiated a better deal or that middle management - members of the GWU, by the way - could have exercised more discipline. No one doubts that. with employee productivity standing at 61 per cent, employee practices increased the contractual cost base. These practices were protected as dogma by the GWU.

These, however, were the consequences of a disease that had already destroyed the shipyards:

• sustained opposition to the various reforms that were required;

• visceral opposition to a decrease in the number of employees;

• dogmatic opposition to consider privatisation;

• impossibility of imposing discipline on the shop floor;

• ridiculous industrial action over banal issues such as "the right to walking time" when the yard was losing millions of euros!

The intransigence on the ground was always met with approval, covert and overt support and sympathy from Labour, which never lost one chance to attack the government. At the same time, neither Labour nor the GWU spoke one word on behalf of the poor taxpayer.

A PL spokesman has asked for my resignation because of the Fairmount losses. What should Alfred Sant have done in 1997 when the yards lost a whopping €65 million or in 1998 when it lost an additional €46 million? In 2008 and 2009 (when the Fairmount contracts are in), we expect to make a combined total loss to the P&L of €45 million, 40 per cent of that registered by Dr Sant. If I should resign then Dr Sant should have resigned twice over.

Dr Sant recognised the need for reform, so much so that he threw out the then board, which was dominated by the workers' representative, and put in a professional set of people led by Noel Zarb Adami with the clear strategy to implement the diversification strategy of the Appeldore report, a strategy this government agreed with and implemented it as Dr Sant had done.

That board may have changed with time but it certainly included persons of the highest calibre at the time of the Fairmount contracts; you could call them the "dream team" of a board. Chaired by a well-known and competent banker, John Cassar White, it included as members the CEO of Playmobil, the CEO of Actavis, the CEO of the Mizzi Organisation and the ex-CEO of a well known clothing firm (who passed away in office) and the CEO of a renowned local logistics company.

The CEO at the yard remained the same person who was appointed under Dr Sant's tenure. When he resigned in 2005, he was succeeded by the person he had recruited as commercial executive and whom he had recommended for the post.

Middle management - strangely, unionised under the GWU as well - were basically the same people that were there in Dr Sant's time. So were the supervisors, the foremen, the employees, all, obviously, members of the GWU. The GWU has, of course, been there since time immemorial.

So, if the strategy remained the same, the board was composed of extremely competent people and management was basically the same as in the time of Labour, what went wrong? The reform agreement may have been signed but it was never really accepted by the workforce, cushioned as it was by its union and by a meddling PL: flexibility, increased production, discipline remained anathema; the profit sharing scheme never got off the ground due to employee scepticism; bad mouthing and whispering in ears remained the order of the day.

Bottom line, it is the PL militants - and the inability of the GWU to control them or distance itself from them - which drove the yards to the wall. They played three cards: that the government would have to give up in the face of union intransigence, that we would never decide to close the yard and all the talk of the EU not allowing subsidies was rubbish.

Well they got one right... the yard will not close down because it will operate under private management. But the yard the PL militants always wanted is now a thing of the past and every taxpayer says "Amen to that!"

Dr Gatt is Minister for Infrastructure, Transport and Communications

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