The government has announced that a memorandum of understanding has been signed with an Italian company for the sale of the government shareholding in Sea Malta Company Limited.

No date has as yet been set for the actual privatisation of the struggling company, but it seems that it will not be long before the government moves out to make way for Atlantica Spa di Navigazione, which is based in Italy.

Sea Malta is a company in difficulty. The last figures indicate that the company is in the red by more than Lm4 million. “Sea Malta is more than bankrupt and is dependent upon, and still operating thanks to, the guarantees and grants provided by the government,” a statement issued by the Department of Information said late last month.

There is no doubt however that the services provided by the company, the maritime link with Italy, need to continue. The company has kept on going, in spite of its losses, just because Malta, as an island, cannot do without such a service.

Yet it is clear that Sea Malta cannot survive in such a scenario, even considering that it has registered losses for nine consecutive years and matters seem to be going from bad to worse. The government cannot keep on subsidising it and a way out of this situation was necessary, sooner rather than later.

Of the three options considered by the government, the one leading to privatisation was deemed as the most viable. The other two – government investment in a new fleet to the tune of Lm7.5 million or the heavy restructuring of the company with the subsequent downsizing – offered no guarantees that the current problems would have been surmounted.

By privatising Sea Malta, the government said that it would be up to the buyer to decide what investment needed to be made to improve the services offered.

The news that the memorandum of understanding with the Italian company had been signed is by no means the end of the Sea Malta saga. Just hours before the government made this announcement, the General Workers’ Union issued a statement declaring that it will not accept job losses at Sea Malta.

It was expected that the GWU would take such a stand. Unions are there to protect the rights of workers and it is therefore the GWU’s duty to defend its members. The government has already said that it will be meeting the GWU, as well as the Federation of Industry, to discuss the new developments and what will happen from now onwards.

The government has already had to contend with claims made by Opposition leader Alfred Sant that Sea Malta was “allowed to collapse” so that there would be no other way except privatisation, a claim that was strongly denied by the Investments, Industry and IT Ministry, which is responsible for Sea Malta.

While it is understandable that the Opposition demands transparency and that the GWU takes a position in favour of Sea Malta employees, one has to look at the overall picture.

As things stand at present, Sea Malta cannot continue to operate. Without Sea Malta, the important sea links between Malta and Italy would be lost, and Malta would be isolated.

Therefore, it is imperative that a solution to the problem is found as quickly as possible so that the company would not continue to accumulate losses and, more importantly, through investment, it gets back on its feet.

Once it was clear that, if the government had to take the onus of investing in the company problems related to inefficiencies and other money-losing practices would not have been resolved and a restructuring exercise would still have not kept the company above water, the privatisation solution seems to be the most feasible.