Kurt Sansone
€67.3m over 30 years for ship repair facility
Manoel Island yacht yard deal concluded
The Cospicua ship repair facility. Photo: Matthew Mirabelli.
The Cospicua ship repair facility will be sold for €67.3 million to new owners after the government concluded privatisation talks with Italian company Palumbo for a 30-year concession.
The money will be paid in yearly instalments over the 30-year period with a net value of €52.7 million.
Finance Minister Tonio Fenech would not say what sum the company would pay upfront when announcing the deal yesterday. He did say the annual rent would exceed €1 million but insisted all the details would be presented in Parliament.
At a press conference attended by Privatisation Unit head Emanuel Ellul, Mr Fenech also announced the sale of the Manoel Island yacht yard to Manoel Island Yacht Yard Consortium, which includes the Midi developers, for a net value of €12.4 million over 30 years.
The new owners of the yacht yard are expected to invest €2 million to improve the facilities and another €4 million for land reclamation to extend the yard.
The government is likely to close the deals in the coming weeks after discussions with the General Workers’ Union and other legal details are finalised. Parliament will also have to approve the land transfer. The union was informed of the deals before the press conference.
Mr Fenech said he was confident Palumbo, which has two small shipyards in Messina and Naples, would make a success of its investment in Malta.
“We carried out a financial analysis of Palumbo’s accounts and the indications we have are that the company is considered to be a success story in Italy,” Mr Fenech said, when asked whether the company was strong enough to take on a much bigger shiprepair yard.
It was evident Malta would provide Palumbo with a strategic base, he added, to conduct work which was now not possible in its two yards.
Meanwhile, Mr Fenech said talks on the privatisation of the superyacht facility at Cospicua and the former Malta Shipbuilding site were stopped because the financial offers were unsatisfactory.
Valletta Gateway Terminals had been chosen as preferred bidder for the shipbuilding site last year but the offer made was “far off” the mark, according to Mr Fenech.
“When we were discussing the bid with VGT they did not want to increase their offer. The shipbuilding area was the biggest of the privatisation process and the government will now re-assess the site’s potential and future use,” he said, insisting some thinking “outside the box” was required.
As for the superyacht facility, Mr Fenech said it was a profitable enterprise, which the government would sell when the right offer came along.
The announcement was greeted with scepticism by the Labour Party, with its spokesman Charles Mangion pointing out that the net amount of €52.7 million over 30 years was equivalent to what the government paid bus owners in one day.
Dr Mangion said he expected the government to give more details about the number of employees the Italian company was going to take on, what investment it planned to make and what obligations it was being asked to enter into.
He also demanded an explanation as to why Parliament was told last November the privatisation of the superyachts facility was “moving ahead” but the minister yesterday said all discussions were stopped.
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12 Comments
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Michael Borg
Feb 4th 2010, 09:43
Lm 960K including taxes is it worth it?
Anthony Pace Gouder
Feb 3rd 2010, 20:35
Some people seem to be more inclined in time wasting remarks on the TYPESCRIPT and spiteful judgment in my regard. Fine !
Submitting their 'sincere' OPINION on the actual subject, as requested. would have been more appropriate .
It is never too late guys !
lgalea
Feb 3rd 2010, 17:28
J Martinelli
How about the mismanagement by those incompetets appointed by EFA and Gonzi Martinelli?
How about the independent public inquiry into the Firmount contract which your Gonzi does not want to hold Martinelli?
Why does he not want to hold it?
What has Gonzi to hide?
Those are questions that you should be asking Martinelli, not attacking the GWU.
Joe Cassar
Feb 3rd 2010, 17:09
@ Mr Martinelli
I note you did not comment about the Fairmount Contract and the way it was negotiated.
Nor about the fact that the police are failing to do their duty in a case where there are clear indication of possible malpractice.
Ron Saliba
Feb 3rd 2010, 17:07
@Anthony Pace Gouder
Clearly you have no idea how economies work. and WRITING THIS WAY IS DIFFICULT TO READ. PLEASE WRITE LIKE NORMAL PEOPLE.
@Kieron O'connor
Whilst your idea of an opera house is good, knowing Malta ( irrespective of any government), if your idea was taken into account, we'd have a new,bigger, uglier tigne all along the port.
J. J. Borg
Feb 3rd 2010, 15:30
Anthony Gouder: just because you write in block letters doesn't make your opinion any more important. This is the internet buddy: all are equal.
Anthony Pace Gouder
Feb 3rd 2010, 15:05
THE TIMING OF THIS AND ANY OTHER PRIVATISATION SALE IS A FOLLY WHILE THE WORLD ECONOMIC SITUATION IS STILL BLEAK ! . IT WOULD HAVE BEEN PRUDENT AND INTELLIGENT HAD THE SALE/S BEEN POSTPONED FOR BETTER TIMES .
WITHOUT DOUBT, THIS INEPT 67 MILLION EURO DEAL IN PETTY 2 MILLION ANNUAL INSTALMENTS , WOULD PROBABLY BE WORTHLESS IN 10 YEARS TIME LET ALONE THE YEAR 2040 !
WISER AND COMPETENT NEGOTIATIONS WOULD HAVE EASILY SECURED A DOWN PAYMENT IN THIS AMMOUNT, JUST FOR THE SUPER DOCK AND THE GOLIATH CRANES HERE PICTURED .
THE HANDLING OF THE POWER STATION CONTRACT , TRANSPORT COMPENSATIONS , THE FREEPORT EXTENSION , AIR MALTA LOSSES , 12,000 UNEMPLOYED WERE NOT ENOUGH . NOW WE HAVE THIS LAME , ROTTEN IRRESPONSABLE DEAL !
WHO CAN SAVE MALTA , BEFORE IT'S TOO LATE ?
I TRULY FEEL SORRY ABOUT THE WAY THINGS ARE GOING .
Kieron O'connor
Feb 3rd 2010, 14:36
52 million to be paid over 30 years. What an embarassment.
Prime development property on the waterfront, if broken up correctly and developed by the government with a proper desgined development plan it could have reaped hundreds of millions. I have seen quay side sites with much less to offer a 6th of the size for 400 million.
They could have developed a waterfront opera house, with plenty parking..unlike the proposed one in valetta. With some vision and a development plan it really could have been a jewell, which would have benefited the whole area.
Instead the buck has been passed and the decision passed off for 30 years down the line when it will have to be revisited.
What your left with is low cost, low tech ship repair..the dirtiest and noisiest of its kind. Who will be paying for the clean up after 30 years? The Italians who will have milked it dry? I seriously doubt it.
J Martinelli
Feb 3rd 2010, 13:48
@ Joe Cassar
You are forgetting that Palumbo is paying net €52.7 million for a bankrupt company!
You must also weigh in the fact that the government is saving millions each year by not subsidizing the losing shipyard.
When you calculate the mathematics right, you will realize that this is a good deal and that the derelict 'yard will be revived, modernized and will employ a few hundred willing and able workers. Their salaries alone will boost the local economy. Mangion's calculations are tainted, politically slanted and do not represent a true picture in the long term. Typical of him and his Party.
One hopes that the GWU will not present any obstacles to this deal, which, if it fails will scare away any other potential buyers!
d.attard
Feb 3rd 2010, 13:00
This does not feel right big time. Malta's ship repair facilities are awesome as so many shipyards closed over the years. The surviving shipyards should be now able to position themselves inteligently to service a still substantial market.
Malta's location is another singular selling point. Ship repair is not a business with an economic life-span calculated in decades but centuries. Ours dates back to before the time of the night. Unless all details are made available to convince one and all of the circumstances underpinning this decision, that to me, prima facie, looks appaling, then the perception that Malta has been sold terribly short may not just stay with a few.
Mark Galea
Feb 3rd 2010, 11:21
@Igalea
the last remnants of the mighty dockyard army has been swept away with this last deal. The mighty torch has been blown off for good.
Joe Cassar
Feb 3rd 2010, 10:38
So the bottom line is that we will be getting less than the sum the Shipyards lost on just one contract - the Fairmount Conversion.
And nobody could blame the workers for that, for the losses were built-in.
When are the police going to DO THEIR DUTY and investigate the way this contract was negotiated and signed?