The tank cleaning farm in Kalkara, which until a few years ago formed part of Malta Shipyards, will be managed for the next 30 years by Waste Oils Company Ltd, a subsidiary of the Falzon Group.
A contract for the privatisation of the facility, which involves the cleaning of ship holds before being dry-docked for repairs, was signed yesterday by the Government and the Falzon Group subsidiary.
The group is already involved in the fuel and oil business, manages the San Luċjan oil storage facilities at the Freeport, has waste oil collection and disposal services in Marsa and imports and distributes fuel.
In 2011, the company’s Marsa facilities hit the headlines for allegedly causing a stench in the area. The planning authority had ordered the temporary closure of the facility until the issue was solved.
After the signing of the deal, Finance Minister Tonio Fenech gave details of the privatisation process. He explained that, although six companies had shown interest in the facility, only the Falzon Group subsidiary made an offer.
The company will operate the facility for the next 30 years under an emphyteusis agreement for €230,000 per year. A one-time payment of €300,000 will be made and the company has undertaken to invest €10.8 million to replace the tanks and upgrade all the other equipment in the facility. Chairman Joseph Falzon said the company aimed to attain the standards required by the International Maritime Organisation.
Asked whether the fact that there was only one bidder indicated a lack of interest in the privatisation process, Mr Fenech said many of the companies that had originally expressed interest did not make a final bid “as, apparently, they got cold feet over the massive investment required in the upgrading of the plant”.
According to original plans, the Government wanted the facility to be relocated to Marsaxlokk due to environmental concerns and the Grand Harbour regeneration project. However, the planning authority refused to grant a permit and the relocation was abandoned.
“Unfortunately, there aren’t many other ports where this operation could move to and we don’t really see any alternative site for the facility’s relocation,” Mr Fenech admitted.
It is estimated that the facility is used by three to four ships a year. It is not being excluded that the new operator will use the plant for other purposes, including the relocation of some of its current activities.