A foreign company which wants to entrust the Malta Shipyards with a project estimated at about $5 billion yesterday accepted to carry out a study to determine the feasibility of such a project.

General Workers’ Union secretary general Tony Zarb said that following eight months of discussions between Cala Corporation and the Malta Shipyards, no agreement was ever reached. He said the union intervened in order to try bringing the project to the Malta Shipyards.

He said a meeting was held at Malta Enterprise yesterday morning. During the three-hour meeting, both parties agreed that Cala Corporation will carry out a feasibility study on the project.

The corporation wants to build 10 ships, known as underwater resorts, at the Malta Shipyards. It is estimated that the project will be carried out over a long number of years and around 2,300 tonnes of steel are expected to be used every month.

The study, Mr Zarb said, will be commissioned and financed by the corporation which will also attain an approval from Lloyds of London regarding these shipping vessels. The company of engineers which will carry out this study is expected to be chosen by 7 June.

After this, the Malta Shipyards committed itself to giving the Cala Corporation a proper quotation for the job.

“There is a great possibility that this project, which seemed to have been lost, will come Malta’s way. The union intervened in the best interest of workers and the country,” he said.

When asked by The Malta Independent about financial guarantees, Mr Zarb said the company is prepared to deposit financial guarantees once the project details are finalised. This problem, he said, was not even mentioned during yesterday’s meeting.

Malta Shipyards reiterates its

position on the Cala Corporation

Later yesterday evening, the Malta Shipyards Ltd issued the following statement:

At a meeting in the presence of Cala Corporation yesterday morning, Malta Shipyards Ltd reiterated its position as sent to Mr Cala on the 2 April 2007. No commitment has been made for the lease of the Marsa shipyard, nor a commitment to build the proposed vessels for Cala Corp.

During the meeting, Malta Shipyards Ltd reiterated its position that Cala Corp. was to commission and pay for the feasibility study that was recommended to Mr Cala by the Malta Shipyards Ltd on 2 March 2007. This feasibility study is necessary as currently the Marsa facility does not meet the construction requirements for the proposed vessels. Thus, it is not technically possible to quote for or construct the vessels immediately. The feasibility study will require from Cala Corp. the full functional specifications as a term of reference. On completion of the study, Malta Shipyards Ltd will be in a position to estimate a quotation provided that Cala Corp. submit to Malta Shipyards Ltd the design package and drawings fully approved for construction by Lloyd’s Register. Thereafter, a full contractual and financial due diligence exercise as is normal practice for a project of this nature would be carried out before further commitments or actions. Moreover, from the information that MSL has on Cala Corporation, it transpires that the company has a total shareholder equity of Lm58,114 and an accumulated deficit of Lm3.6m. In the interim, Malta Shipyards Ltd will continue to market the shipyard facilities.

We now understand that Cala Corporation is undertaking to conduct this feasibility study we asked from it two months ago.

Since the meeting of 2 March 2007, held at Malta Shipyards, adverse media statements have been made that result from the failures of Mr Cala to adhere to the process agreed to at that time. Malta Shipyards Ltd is therefore separately assessing possible legal action against the Cala Corporation to protect the reputation of the company.

The business relationship with clients is the exclusive remit of management. The intervention of the General Workers’ Union in this case served no purpose except for the Malta Shipyards Ltd management to reiterate the original terms set in March 2007 to Cala Corp.

Malta Shipyards Ltd continues to follow potential work prospects with serious clients of good financial and commercial standing during the normal course of business. In fact, Malta Shipyards Ltd has already secured work for the Marsa Facility from existing valued customers. Malta Shipyards Ltd will commit no further resources to the Cala Corp. project prior to receipt of the completed feasibility study.