Infrastructure Minister Austin Gatt told Parliament yesterday that the dockyard had been "a historic and political failure" for the country which had cost taxpayers €980,693,257 in 40 years. In his view, privatisation should have been taken in hand years ago, and it had been on the cards since the minute the people approved the referendum for Malta to join the EU.
Speaking during the debate on a motion to transfer the ship repair facilities to Palumbo SpA, Dr Gatt said the dockyard had cost the country of €70,000 per day for the past 40 years.
The dockyard's losses had been a constant as governments, prime ministers, ministers, directors, managers and workers changed. The losses had continued even as various management systems were adopted.
"We cannot deny the fact that the dockyard has been a historic failure for the country. It has also been a political failure, with the enterprise having been kept open despite the mounting losses over many years," he said.
In this context, the decision to privatise the 'yard should have been taken a long time ago.
Another constant, Dr Gatt said, was that in the past 40 years the dockyard had always been government-owned, and the tendency was that problems such as this were found in government enterprises.
It was also evident that this problem had not been tackled before because the dockyard had never been allowed to function on commercial lines. Among the reasons was the political militancy of the General Workers' Union. One only needed to speak to the directors and managers on the union's behaviour after 2003, when many reforms were meant to be brought in. As efforts were made to implement the Appledore report, which everybody said they agreed with, there had been a whole series of unofficial strikes and other actions, including work to rule.
This showed how wrong political trade unionism was, Dr Gatt said. Just as wrong was how some opposition politicians had continued to regard the dockyard workers as their "red army" - an attitude which had continued to make management difficult.
Another problem was that managers and workers were in the same union, making the enforcement of discipline by the management difficult.
"The lesson from the dockyard is that while trade union rights are important and should be respected, when trade unionism becomes political and political purposes take priority over trade union purposes, things go wrong," Dr Gatt said. The attitude of the GWU at the dockyard was far different from how the GWU acted in the private sector.
While this was not the only reason for the demise of the dockyard, it was certainly a very major contributing cause.
Dr Gatt said the Fairmount ship conversion contract which was being blamed for the closure of the dockyard had cost it €32 million. Over the same period the dockyard had lost over €100 million. During the 22 months of the 1996-98 Labour government led by Alfred Sant, it had lost €135 million.
Privatisation, he said, had been on the cards ever since Malta joined the EU. The EU had allowed state aid to the shipyard up to 2008, and it was evident that by that year the shipyard must either became profitable or it would have to close. Before the last election the Prime Minister had been clear that the 'yard was heading towards privatisation because profitability had not been achieved.
In 2008, after the elections, the government had been faced with a situation that it could neither give the dockyard further state aid nor issue financial guarantees. Meanwhile, the losses were continuing to mount. The choice was a simple one - closure and possibly conversion into a waterfront and hotel facilities or retention of the dockyard, but in private hands.
A well-run dockyard was clearly an asset for the country, and the government had therefore opted for privatisation.
It was evident, Dr Gatt said, that the Maltese wanted to work in a well-run dockyard. A small recruitment advert by Palumbo, published in the inside pages of a newspaper, had recently attracted hundreds of applications.
This, he added, was the inevitable conclusion of a story which had been smeared by politics and had led to a financial failure accounting for a quarter of the national debt.
Labour MP Chris Agius said dockyard workers had worked diligently and completed contracts on time, and the root of the dockyard's ills were government appointments to the management of the enterprise. Dockyard workers had been promised that the dockyard would remain open, but the opposite had happened.
He pointed out that while Dr Gatt had said that the dockyard had not made a profit since 1982, the PN was in government for most of the years since, and the ultimate responsibility was political.