The fact that the privatisation of Malta Shipyards has been mishandled from the word go is a sure and definite certainty. This project is being handled by the Privatisation Unit within the Finance Ministry who seem to be the only people who are privy to the “expressions of interest” that have been received. I have tried to obtain some information about this unit from the government internet portal but it seems that this is the only section within this ministry that is not listed anywhere.

Who are the people running this unit? What is their experience of the marine industry, shipyards and general ship repair/services management? What exactly is their experience in EU legislation and commercial privatisation requirements of such large and complex concerns? During her visit to Malta the EU Commissioner for Competition rejected the government’s business plans for the privatisation as those that were proposed and submitted were unacceptable, creating a dilemma for the ministry and the Privatisation Unit which I doubt very much if they can cope with, and sending the government back to square one.

The government has known from way back and well before the last election in March that under EU requirements all subsidies to the shipyard had to cease at the end of this year. Also, it has been common knowledge that any losses recorded by the enterprise cannot just be written off by the state. It has been argued that taxpayers’ money cannot be squandered by governments at will. The Malta Shipyards case is not the only one being dealt with by the Directorate General for Competition as Poland, with three shipyards, and Italy, with Alitalia, are in the same predicament. We are in the big league now as members of the EU, and we have to start abiding by rules and regulations and stop begging for unwarranted derogations, special treatment and concessions. We already have had many of those and they have not always been of benefit to Malta.

Together with her colleagues in the DG for Competition, Neelie Kroes’ job involves both setting EU-wide rules to guarantee fair competition and enforcing them fairly and with vigour, but also to prevent and punish any breaches. One of her responsibilities is to ensure that “taxpayers’ money is used to pursue socially desirable objectives without disproportionately distorting competition or wasted when public authorities grant subsidies to businesses”. This definitely sets the seal on Malta Shipyards.

As a result of sheer lack of foresight by its advisers, the government has found itself floundering on the following fronts:

The privatisation business plans were not acceptable to the EU Commissioner for Competition, and new and totally revamped plans were asked for;

The writing off of the e100 million accumulated debt has likewise been rejected as it violates EU regulations;

Failure to come out with a feasible new business plan by the end of the year might mean that Malta Shipyards would have to be declared bankrupt and the company to be liquidated, therefore making the workforce redundant;

As things stand at the moment with the vast majority of the workforce having already opted to take the early retirement and redundancy schemes and pocketing the e58 million windfall that they have been offered, the government is ending up by not having any tangible and working industrial concerns to privatise.

In spite of all this it was reported in the media that the Finance Minister recently said that it’s the government’s intention to keep the company going until the pending contracts are completed, but he stated that he is positive about the expressions of interest and that he’s positive about the privatisation process.

As a result of this mass exodus of the workers from Malta Shipyards, the government and consequently the nation will come in full possession of a huge tract of real estate around the whole perimeter of French Creek, free and un-encumbered by any loss making entity. This in itself might be a godsend to the nation unless the government fudges up the whole issue once again by letting this land to slip out of the nation’s hands and into those of some unscrupulous speculator.

It has already been said that trying to sell the shipyards with an inadequate complement of employees and/or as might be the present situation, without any employees, is exactly the right mixture for the failure of any industrial privatisation. But then again if there are no employees then there is nothing to privatise. The next issue will then be what is to be done with the real estate.

If any industry is sold without employees this becomes strictly an asset sale privatisation where bidders compete to offer the state the highest price for the assets, creating revenues for the state to redistribute in addition to new tax revenue. It is then up to the buyers to decide what to do with the real estate that they would have acquired. They are under no obligation to run it as an industry or in the same way as it was intended originally. Are we in the market to privatise a working industry or have we now changed the deal into a real estate speculation?

This brings me to another question, which has been irking me for some time. What is the situation and progress of the long overdue proposed development of the number 1 dock area, and when is this area going to be integrated as a part of Cospicua as has been promised years ago? Who are the developers entrusted with the development and what are taxpayers who have been forking out so many millions of Maltese liri and Euros as subsidies for Malta Shipyards going to benefit from this project? We as a nation have had enough of mismanagement, white elephants and speculators who have been milking the Maltese taxpayer dry for so many years. It is about time that we start to have some tangible return on our investments with the government who after all is the guardian of the nation’s wealth.

It is an understood fact that the government, faced with a negative opposition, could not have divulged its plans for Malta Shipyards before the March election. We should be in no doubt, that if the Prime Minister had done so, the then Opposition Leader would, as always, have taken a contra trajectory and would have promised the earth to the 1,700 shipyard employees. This would have placed us in a worse situation with the EU, and apart from having had to continue to pay the subsidy to maintain the shipyards for many years to come, we would have been fined millions by the EU for not conforming with its current competition laws.

To summarise, it can be said that the government, the opposition, the General Workers’ Union, and all those who are familiar with the marine industry, economics and management were all in agreement that the final solution for Malta Shipyards was for it to be privatised as a going concern.

Most of us are of the opinion that the planning and handling of the privatisation process has been mismanaged and handled incompetently from the very start and was bound to fail miserably due to the random exercise to reduce the workforce without due requirement planning, and consequently ending with literally no employees.

But then again if the dockyard shall cease to exist as from 1 January, government shall be duty bound, accountable and fully responsible to develop the real estate footprint around French Creek, as well as the footprint around the number 1 dock area in Cospicua, and the ex- Malta Shipbuilding Yard at Marsa, as part of the proposed Grand Harbour restructuring and development plan to the benefit of the whole nation and as part of our national heritage.

With reference to the Manoel Island Yacht Yard, there is still hope to rejuvenate this complex through private ownership as a new company with modern productivity methods and agreements, and new work contracts not only to safeguard this important marine concern but also to safeguard the number of outside employees who are dependent on a healthy local yacht servicing industry. The minister is on record saying that the government is committed to give SMEs every chance to develop as they offer tangible employment to many. Manoel Island Yacht Yard qualifies adequately as an SME as it may be developed into a medium sized entity.

This is the last hurdle in this sorry saga, but not everything is lost. We still have very valuable assets in hand which can be redeemed and developed. Making a success of this situation depends on the competence, integrity and vision of the people entrusted with this vast project, which has not been the case so far, and the foresight of the Prime Minister and his Cabinet. Prove us right this time.

Reno Spiteri is a marine and industrial consultant