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.