Privatisation of Malta Shipyards

The recent pronouncement by the government about its intentions to privatise the shipyards has justifiably provoked a public debate. The shipyards hold a central place in the country's economic, political and social history.

They were the main providers of productive employment when most of Malta's population was concentrated in the harbour region. The "dockyard school" was, at the time, considered to be the best place where skills could be learnt from experienced masters of the various disciplines involved in ship building and repair.

Over the past four decades, the role of the shipyard and its net contribution to the economy declined as the economy became more diversified and employment was being generated in other sectors, first manufacturing and later services. From a net contributor to the economy, the shipyards became a burden, with their survival depending on a regular infusion of tax money to keep them on life support.

Historians will judge the current state of affairs at the shipyards from different perspectives. Some will conclude that the state of decline was reached because the Malta Drydocks and Malta Shipbuilding had become too politicised. Others will claim that there was insufficient investment to modernise its facilities and human resources to meet the contemporary needs of the ship repair industry. Whatever combination of factors that might have played a role, the fact remains that the EU regulations prevent the government from continuing to subsidise the shipyards after 2008 and that the efforts made to pull the company out of life support and place it on the road to profitability have failed.

In such a situation, the options available are outright closure or privatisation, with the second being generally accepted to be the better option.

However, the debate must now focus on the nature of the privatisation process and also on actions that need to be taken on employees that face redundancy as a result of such privatisation and whose number one can only guess. It is sincerely hoped that in the same way that redundant workers in manufacturing companies have been redeployed in productive employment in the private sector, efforts to find alternative suitable employment for these employees will be equally successful.

The Malta Employers' Association has pronounced itself against the indiscriminate use of early retirement schemes. Many of the employees who may face redundancy will be highly skilled in areas where there is a chronic shortage in the labour market (welders, for example).

The MEA has also repeatedly made proposals to redeploy these employees in the manufacturing and installation of photovoltaic units, possibly through a private-public initiative. Given the soaring prices of fuel, a cost benefit analysis should be conducted to study this suggestion.

On another front, the shipyards should not become easy pickings and the nature and extent of privatisation has to be scrutinised to guarantee the best price and to harmonise the activity of the new company with the overall strategy of the harbour area.

The current situation at the shipyards calls for consultation and input by all social partners and the Malta Council for Economic and Social Development should be an ideal forum where proposals can be put forward in order to ensure that the country benefits as much as possible from of the privatisation process. There is no question that the shipyards will remain to be a vital national asset with the potential to generate activity that contributes to national economic growth.

Mr Fava is president of the Malta Employers' Association.


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