The final chapter in the privatisation of Malta Shipyards was opened this evening when motions for the transfer of the ship repair facilities in Grand Harbour and the Manoel Island Yacht Yard, started being debated in Parliament.
Finance Minister Tonio Fenech moved a motion for the transfer of the ship repair facilities to Italian company Palumbo and explained that the transfer included docks 4,5,6, and 7.
He said that the land would remain government property and was being transferred on a 30-year emphyteusis.
He said that similar arrangements applied for the transfer of the Manoel Island Yacht Yard to Manoel Island Yacht Yard Ltd.
The minister said that Palumbo would invest €31 million over 30 years in the ship repair facilities, of which €23 million would be invested in the first five years of the contract.
Manoel Island Yacht Yard Ltd would invest €6 million.
He said that at current prices, the total value of the Palumbo 30-year contract was €52.7 million while the yacht yard contract was worth €13 million.
Palumbo would be making an upfront payment of €18 million while Manoel Island would pay €5.2 million, plus rents in both cases.
Labour MP Anglu Farrugia criticised the government for having brought about the closure of Malta Shipyards and criticised the government for having broken its job security promises to the dockyard workers.
He said that government revenue from the shipyard contract would not even cover the losses from the Fairmount contract.
Dr Farrugia said he had his doubts over whether the government had done enough to attract bidders to the privatisation of the dockyard.
This was the first privatisation exercise where the jobs of the workers had not been secured, Dr Farrugia said.
He asked if it was true that Palumbo Malta had a share capital of just €2,000 and said this was unbelievable. Furthermore, Dr Farrugia said, Palumbo could 'speculate' on the back of this contract as long as the government was given what was agreed in the contract. This, he said, was exploitation of assets owned by the people.
Furthermore, there were no binding conditions on how Palumbo would invest in the facility. This contract, Dr Farrugia said, was shameful.
Nationalist MP Robert Arrigo said that had the shipyard been in private hands, it would have been sold or closed many years ago. It was worth keeping in mind that despite the dockyard having closed, the people were still spending €1 million a week on interest payments as a result of the dockyard losses.
POLITICAL MOTIVES
Evarist Bartolo (PL) said there was a political motive for the weakening and closure of the dockyard, in order to weaken the Labour movement. The government, he said, could have adopted other models for the dockyard not to be such a burden on the state.
Furthermore, he said, it was unfair to blame the workers for the dockyard's woes, when everybody knew about the shortcomings of the management.
The government spoke about financial losses, but what about the skills base which the country was now losing?
Mr Bartolo said the government had not negotiated good conditions for the sale of the dockyard, and an important assets was being sold cheaply, as was done in the past in the sale of Malta Freeport, Malta International Airport and Mid-Med Bank, among others.
DOCKYARD LOSSES
Meanwhile, Infrastructure Minister Austin Gatt, replying to a parliamentary question, said that in the past 40 years the government spent €1 billion to support the dockyard. Malta Drydocks in the past 40 years only made a profit in nine years and made losses in the remaining 31 years.
Malta Shipbuilding in 22 years only made a profit in its first two years - 1982 - €9,287 and 1983 - €5,693.