Adds vote, details by the Minister of Finance -

The House of Representatives this afternoon approved two motions for the transfer of the ship repair facilities of Malta Shipyards to Palumbo Spa and the Manoel Island Yacht Yard to the Manoel Island Yacht Yard Ltd.

The Opposition voted against the motions.

Earlier in the debate today, Prime Minister Lawrence Gonzi said that he had asked the Commissioner of Police to investigate claims made to an official of the Office of the Prime Minister in September that somebody involved in the adjudication of a call for tenders had requested money.

Dr Gonzi said that the claim was made by people involved in the tender bids. The official immediately alerted the Finance Ministry which investigated the claim. Nothing resulted from it, but the call for tenders was cancelled and the ministry decided that it would reissue the call in the future.

Dr Gonzi was speaking in Parliament during the debate on the dockyard privatisation.

He noted that Opposition leader Joseph Muscat, speaking on Monday, had asked if he (the prime minister) or his office had received claims of somebody having asked for money during the adjudication of tenders.

Dr Gonzi said no such claims had been made with regard to the tender negotiated with Palumbo for the pivatisation of the ship repair facilities.

However, since Dr Muscat appeared to also be referring to other calls for tenders, upon his return from a conference in Madrid last night he had asked his officials to investigate further, and he was then told of the September case.

Dr Gonzi said he immediately asked the Commissioner to investigate, and he asked the official who received the claim to give all information to the Commissioner for further investigation.

Finance Minister Tonio Fenech, speaking later on the same subject, said an official in his ministry approached him last September and told him that a person whose identity he did not reveal but was involved in bidding for the superyachts facility, had alleged that somebody had asked for money.

There were five bidders in that process.

Mr Fenech said he had summoned the members of the negotiating team of the Privatisation Unit and told them about the allegation. All denied involvement and submitted a declaration to that effect. Another declaration was submitted yesterday. Mr Fenech said he had stressed to them that the process needed to be fully transparent.

Interjecting, Opposition leader Joseph Muscat asked if the minister had also made his enquiries at Mimcol (the government holding agency).

Mr Fenech said the negotiating team included two officials from Mimcol.

Replying to another point made on Monday by Dr Muscat, Mr Fenech said that Chris Bell, the former CEO of Malta Shipyards, was not involved in the privatisation negotiations. He was only asked to supply information to the data room and to facilitate site visits.

Earlier in his speech, Dr Gonzi said that Parliament was living a surreal experience where the Opposition MPs spoke like they were living in another world when they discussed the dockyard.

At the same time as Greece was suffering the consequences of not having reformed itself, and at the same time as the world was continuing to weather a financial crisis caused by unjustified spending, the Labour Opposition were trying to continue to try to justify what had happened at the drydocks along the years.

Dr Gonzi said the Opposition was being irresponsible to the detriment even of the dockyard workers who were used and abused.

Most - but not all - of the workers at the dockyard had done what they could at the dockyard - some had paid the ultimate sacrifice - but there was no escaping the fact that the dockyard had had an excessively large work force and even if the 'yard had reached high productivity levels, it could still not make money.

Far from having 'thrown out the workers' as the Opposition had claimed, the government spent €50 million on voluntary early retirement schemes introduced in agreement with the GWU.

What he regretted, Dr Gonzi said, was that some decisions on the dockyard were not taken earlier, when world economic conditions were better.

He had headed a task force which included representatives from the government, the PL and the GWU, aimed at bringing about reforms at the dockyard. As a result of that work, the EU had agreed to allow a period of several years of state aid in order to give time for the reforms to work and for the dockyard to break even.

The Opposition MPs, however, ignored all this, with Joseph Muscat even claiming that the privatisation of the dockyard was an act of vindictiveness against the PL.

Dr Gonzi recalled how the workforce of the dockyard had been gradually reduced from a high of 3,300, with the task force having introduced the first early retirement schemes. As a result the number of workers dropped to 1,300, although the target had been at around 700.

Dr Gonzi said that the dockyard started reducing its losses in the first couple of years after the task force decisions and there was some hope that the 'yard could turn the corner. At the time the dockyard had an accumulated debt of Lm300 million (old currency) which was absorbed by the government, raising the national deficit to close to 10%. But the surreal Opposition also completely forgot about this and claimed the government wanted to close the dockyard.

The dockyard had had a seven-year window of opportunity, but then all manner of problems started being raised such as when the workers wanted to be paid for 'walking time'.

Efforts were made, with some initial success, to diversify the dockyard into ship conversion work, until losses were made on two contracts. But even without that complication, the dockyard's problems were still such that it could not achieve break-even by the target date of 2008.

The government could have sought to negotiate an extension of the state aid period given by the EU, but that would only have meant allowing the injury to fester. The government, instead, decided to tackle the problem head-on and 'bite the bullet'. Had the government heeded the PL advice not to privatise, the dockyard would have been declared bankrupt and 1,300 workers would have been redundant, without any early retirement schemes.

The workers had been assisted to find productive work. Some were better off, others less so, especially those who used to earn as much in overtime as their salary despite working for a loss-making company.

Dr Gonzi said the privatisation of the shipyard meant the opening of a new chapter for the enterprise. Italian company Palumbo had been selected after an international call for bidders overseen by the EU. It was the EU, he stressed, which had insisted that the call for bids could not be limit the use of the site for ship repair activities and eventually it was agreed that the site would be used for maritime activities.