The Italian ship repair company that won the bid to take over the property of the former Malta Shipyards will not dispel doubts that have been raised on whether it fulfilled contractual obligations during its first year of operation.
Palumbo general manager Joseph Calleja said the company would not comment on questions raised by General Workers’ Union official and former Malta Shipyards chairman Sammy Meilaq.
“If the company speaks it will do so formally through a communication to all media,” Mr Calleja said.
Writing in The Times last week Mr Meilaq asked whether Palumbo had fulfilled its contractual obligations to invest €5.45 million during the first year of operation which came to an end in June.
“But if one takes a quick look over the bastions surrounding the shipyard one finds it reasonable to conclude that no such amount of development has been carried out,” Mr Meilaq said.
Government signed a 30-year lease agreement with Palumbo in June last year and the company agreed to invest €23.5 million over a five-year period.
In the first year the company had to invest €3.45 million on machinery and €2 million on infrastructural works. The commitment for the second year was an investment of €5.3 million.
However, when asked whether Palumbo had fulfilled its contractual obligations for the first year, a Finance Ministry spokesman said an evaluation of the company’s tenancy at the shipyards was “currently taking place”.
The spokesman did not say whether Palumbo had presented a business plan justifying the investment it was contractually bound to make in the second year of operation.
“No further information can be provided at the time being,” he said, ignoring another question about the number of workers Palumbo has employed.
In June last year, when signing the contract, Finance Minister Tonio Fenech had said Palumbo would initially employ some 100 people but Mr Meilaq pointed out that the company only employed “a squad of 50 people” on temporary contracts.
When asked, the ministry did not say whether Palumbo’s employment levels fell below government’s expectations. In the 2008 parliamentary debate on the privatisation of Malta Shipyards, Prime Minister Lawrence Gonzi had said that one of the main criteria for the choice of the best bidder would be “the company which offered to employ the highest number of workers”.
In his opinion piece Mr Meilaq asked whether Palumbo was in default.
Earlier this year the shipyard won the bid to operate the super yacht facility in Cospicua, which used to form part of Malta Shipyards.
The facility was handed over to Palumbo under a 30-year concession and the company was contractually bound to invest €3.6 million in the first five years.