Updated: Fairmount losses 'reached €80m'

The losses made by Malta Shipyards on the Fairmount ship conversion contracts amounted to €80 million and not €36 million as quoted in a government-commissioned report, the GWU said today.

GWU general secretary Tony Zarb said PricewaterhouseCoopers, who compiled the report, were not asked to come up with net losses but with the 'negative contribution'. They thus excluded overhead costs which the union conservatively estimated at at being €21.6 million for the conversion of the Fjord and €18.7 million for the Fjell.

Mr Zarb said the shipyard had given the union the overhead costs for the three years before the contracts were awarded. These reached 216 percent. The union calculated the overhead costs of the projects on the basis of a cautious 150%.

Mr Zarb complained that PricewaterhouseCoopers never spoke to the union when the report was being compiled.

He said that over the coming weeks the union would be publishing more information and, eventually, a full report of what happened. He reiterated the union's call for an independent inquiry and urged the Opposition to raise the issue in Parliament.

MINISTRY SAYS GWU IS CONFUSING FINANCIAL CONCEPTS

The Infrastructure Ministry in a reaction to the GWU press conference said the inquiry report into the Fairmount contracts had not left anything out.

“The independent inquiry that was concluded a few weeks ago considered all the financial aspects directly or indirectlty related to the Fairmount contracts,” the ministry said.

“It is international practice that in such cases, investigations focus on the net losses.”

The ministry said GWU Tony Zarb had confused financial concepts, mixing the net losses on these contracts with the dockyard’s general losses. These two aspects were different as the dockyard had not worked only on these projects.