'Why 'yard restructuring process failed'

Opposition spokesperson on Public Investments Helena Dalli has told Parliament it was mismanagement, irregularities and wrong policies that had damaged the restructuring process of the dockyard.

Dr Dalli said PriceWaterhouse Coopers' report showed that, by and large, losses had been made under PN governments and profits had been made under a PL government. Despite an existing business plan, losses and a lack of productivity could be noted.

The GWU had always insisted that the answer to the dockyard's privatisation was a workers' cooperative, and had been trying to get the government to debate this publicly with persons from the dockyard. A draft agreement had been proposed to former Minister John Dalli, but the workforce had received no feedback. The government had simply ignored the request.

Regarding the transfer of land, Dr Dalli said that the situation was misleading and the way the company was registered was unclear, especially when looking at its share capital. From a commercial point of view, the contract was defective and was not in Malta's best interests.

What sort of vessels were going to be repaired? Were military and nuclear ships covered? What safeguards were going to be taken to ensure these docks did not turn into a military base?

She criticised the fact that Palumbo could keep its legal entity as a shell company but was free to change the shareholder without the government's approval and requirement to disclose their identity. The promise of sale did not provide safeguards for such eventualities. It went farther than the monitoring of obligations that arose from the promise-of-sale agreement.

Dr Dalli said that in terms of the transfer of public land on a temporary basis, certain aspects could impinge on the use of the dockyard. Parliament's approval would be bypassed, and this could create situations that affected Malta's economy. It was not clear what Palumbo's workforce was contracted for. How many would be employed? Who were Palumbo's customers? A lot of information was missing.

Owen Bonnici said that the contract stipulated that in the first year, the lease payment would be waived. In the second year there would be a discount. This loss would be the equivalent of the losses on the Fairmount contract.

He added that when one looked at the conditions in the contract, it was very hard not to criticise it. It should have been better negotiated.

Improvements had not been discussed, and people knew that this was a sine qua non when signing a lease or rent contract.

Dr Bonnici also deplored the fact that during the last 10 years of the contract, the government had the duty to pay for the value of immobile property. It had not even negotiated with Palumbo to take care of the surrounding fortifications in Cottonera.

Should the government expropriate property from Palumbo for public use, it would have to pay the net book value.This was in stark contrast with the way the government treated common citizens when expropriating their land.

He said the government had given Palumbo the right to use the sea surrounding the dockyard for the princely sum of just one euro a year. And the company was free to negotiate it with third parties and make a profit.

Palumbo had reserved the right to use workers onshore and offshore, even for all types of support services. What exactly this entailed was unclear.

The contract also allowed the Italian company the right to sub-let to third parties. Why had the government not sought any financial compensation related to this?

Dr Bonnici said the contract stated that Palumbo should pay €18 million for the assets of the dockyard, but no inventory had been found. So how had this figure been arrived at?

The Maltese people needed to know that their assets were not going to be sold cheaply.

Palumbo should have an investment plan to upgrade the rented space and give adequate services. They had committed themselves to spending €19 million in the first five years. Finance Minister Tonio Fenech had said that at the end of the five years, Palumbo were obliged to pay €7 million in maintenance. This, Dr Bonnici said, was not stipulated in the contract.

How had Palumbo been tied down to build a canteen and yet there was no mention of any obligation to employing former dockyard workers?

Dr Bonnici acknowledged that being part of the EU meant that one could not discriminate against non-Maltese workers. But the Transfer of Business Enterprise Directive clearly stated that if a place was previously redundant and went back into operation, one should primarily seek to employ former workers. Why had the government not done its utmost to ensure they would be employed with Palumbo?

The Prime Minister's justification that the Italian company did not want did not hold water. One could not ignore the 2002 European directive that protected workers' rights. Transferring did not mean a cessation of rights. One needed to look at workers' rights, and this was one of the reasons why Malta had joined the EU.

Concluding, Dr Bonnici called on the government to review the contract and obtain better conditions.