Labour deputy leader Anġlu Farrugia said yesterday that the contract the government had signed with Palumbo Malta Shipyard Ltd for the transfer of the shipyards was similar to that it had signed with BWSC for the Delimara power station extension: it was a shameful contract and a national disgrace. The people, he said, had every right to be worried.
Speaking during the debate on the motions to transfer land to the new owners of the shipyards, Dr Farrugia said he had reservations why certain people who knew certain things were keeping back from revealing them. These people, he said, did not harbour Labour sentiments but were nonetheless embarrassed by the way things had been negotiated.
The proposed future investment in Manoel Island yacht yard was to be made according to a detailed plan. But that of the drydocks was not tied down. Was this a coincidence? he asked.
Dr Farrugia called for clear answers from the government, underlining that Palumbo had only some 60 people on its payroll - less than Cassar Ship Repair Ltd, a local company providing ship repair and maintenance services.
The dockyard, which had operated for centuries, was the best in the Mediterranean in Malta under the British. Under Labour governments, the dockyard and dockyard workers had a very good reputation, which resulted in profits. Foreigners had invested more than Lm20 million.
On the other hand, under PN governments, the dockyard never made profits except for one year. The biggest losses were between 2003 and 2009 in spite of downsizing.
In 2001, the PN government had drafted a structure plan aiming at a profit of €600,000 and at making the dockyard sustainable. In spite of substantial downsizing it incurred losses amounting to €212 million, amounting to 22 per cent of all losses of the dockyard made between 1971 and 2010.
On October 19, 2001, the Labour opposition had told the government about its reservations that the structure plan would reach the targets. However, the government still proceeded with the plan.
The PN government itself had instigated and contributed to this situation. But through its inefficiency, the PN would go down in history as the government that closed down the dockyard after several centuries of success. The dockyard would now be given on a silver platter to foreigners.
Dr Farrugia said the dockyard's losses could not be attributed to the workers. They had to be attributed to those irresponsible persons who drafted the Fairmount contracts. Direct responsibility should be attributed to the government, especially Austin Gatt, the minister responsible for the dockyard.
The board of directors did not go into the methodology of the execution of the contracts. This was gross incompetence, he said.
The government had replaced several Maltese workers with foreigners. While the latter cost more than the Maltese, there was no indication that the foreign workers were more productive.
In the circumstances, the government could not do away with its political responsibility of this situation. He asked whether such situation was intentional to lead to the closure of the dockyard.
Dr Farrugia said the government did not show any initiative to save the dockyard. Prime Minister Lawrence Gonzi was quoted as saying that not only would he not close the dockyard but also that "he had no plans to downsize the shipyards".
Moreover, during the 2008 electoral campaign, Dr Gonzi had written a letter to all dockyard workers individually, telling them that he believed in their capabilities and that the dockyard still had a future as a good contributor to the economy. He had told them that, together, they could reach the targets. Dr Gonzi had deceived the dockyard workers and their families.
Meanwhile, the PricewaterhouseCoopers Report concluded that certain contracts were loss-making ventures before they had even started. Subsequent events contributed to further increase in the scale of the loss. The minister responsible should explain to the people how nobody was aware of this situation before the contract was signed. The government kept forking out funds for a contract of such nature that resulted in the closing down of the dockyard.
There was a national outcry. Seriousness required that the people knew who was responsible.
Dr Farrugia said it was the PN government that sold national assets to foreigners when these were making profits, including the Freeport, gas distribution facilities and the banks.
Dr Farrugia asked whether the government had conducted a study on the potential of the docks the government was hiring to Palumbo and how this would affect workers.
Palumbo were not even obliged to retain the yard workers. This was in stark contrast with what the workers had been promised. Even the last 60 workers were not allowed to negotiate their conditions of employment if they had been hired by Palumbo.
Was it true that Palumbo Malta Ltd, a company with registration No. C48983, had only a share capital of less than €2,000?
Clause 6 of the contract provided that the company could make other uses of the yard by simply informing the government of its intention and not ask for any permission. Could this mean that the company could stop all shipping activities, go into land speculation and turn the area into villas? he asked.
Palumbo has also been authorised that it may grant the place, in whole or in part, to third parties by way of a lease, an operation agreement or by any other means provided that the company should remain responsible to the government according to the contract signed between the parties. Dr Farrugia said this could mean the company could make more money from sub-leasing without owing the government anything more than what was in the contract. Where was Malta's interest?
Dr Farrugia said Palumbo was not tied down as to how the proposed investment was be made. This was in contrast to what was agreed with the new Manoel Island operators which would be responsible for carrying out any investment at its expense.
The government was just giving away Malta's wealth with no respect to the country or its workers.