Italian company Palumbo formally took over the dockyard today and its managing director said his priority in the first year was to restore the international credibility which Malta Shipyards had lost.

Antonio Palumbo, who signed the privatisation deal with Finance Minister Tonio Fenech, said his company was confident that this venture would be a success if there were 'tranquillity, flexibility and low costs'.

This, he said, was an important 'adventure' for his company which has two far smaller yards in Naples and Messina.

Mr Palumbo said his company was small but strong, and the purchase of the Malta dockyard demonstrated its intention to expand.

He said the dockyard in Malta had lost credibility abroad, and restoring that credibility would be an important priority in the coming months.

Asked whether the company would give priority to the employment of Maltese, he was evasive but said it all depended on professionalism and costs, but the human element was very important in ship repair.

Mr Fenech said this was a new chapter for the dockyard which demonstrated what the government had always said, about the need to have a dockyard which did not rely on subsidies and was a contributor to the economy.

He said that Palumbo had committed itself to invest €32 million in the shipyard, with just over €23 million in the first five years.

The company will initially employ 100 workers and their numbers would then increase.