The Government seems to have struck a great deal in the sale of its 73.72 per cent stake in Tug Malta.

The agreement saw the government securing not only the sale of the shares at 3.4 times their net asset value, but also assurances from the buyers, Rimonchiatori Riuniti Spa, to the effect that none of the current 90 workers would be laid off for the next five years.

Another good stroke was that the buyers have committed themselves to investing at least EUR22 million in the company over the next five years and have also undertaken not to transfer the shares they have taken over for five years.

If anything, one would have to say that this was a textbook case for privatisation – a good deal all round. Government got more for the shares than they were worth, the future of the workers has been safeguarded and additional investment has been secured that should allow the tug service to grow and be further modernised.

The net asset value of the 1,080,000 shares sold by the government was EUR7.22 million, yet the buyer paid out the handsome sum of EUR24.7 million, which will go into the Treasury’s coffers. Rimonchiatori Riuniti Spa itself is a strong company that was set up in Genoa in 1922. It has a grand complement of 22 tugs and has registered an average profit of EUR18 million every year between 2002 and 2006. Tug Malta itself is no slouch. It was set up in 1980 and has six vessels, two of which have been added to the fleet in the past two years.

The government is doing exactly what it should be doing – getting out of an enterprise that should be entirely commercial in nature. In fact, the government admitted that Tug Malta was struggling as a result of tough competition. However, the decision to get out while the going was still relatively good – getting a good financial deal in the process, as well as securing future investment and security for the employees – is surely to be applauded.

The Italian company has also pledged to offer the necessary support to local maritime institutions for the training of sea cadets and will also employ locally trained cadets. The investment that will flow into the company will ensure that the pilots, who are well known around the world for their skills, especially their manoeuvres around Grand Harbour, will continue to flourish. There seems to be a bright future in store for Tug Malta and one hopes that other deals (although there are not that many left to strike) can be pushed through.

The strategy of privatisation is in line with government’s very frank admission that it wants to release all interests that it does not feel sufficiently competent to handle. This is not a sign of weakness or ineptitude, it shows that the government knows what it is doing and has a clear plan to continue opening up Malta’s markets. It’s an old adage, but if you can’t stand the heat – get out of the kitchen. That is precisely what the authorities have done in this case and they have got a great deal out of it all round.

A feather in their collective cap, one must say. The government has come in for criticism of its dealings in the past, but surely, this job was definitely well executed.