News | Sunday, 22 February 2009

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REVEALED

DOCKYARD PRIVATISATION IN SERIOUS TROUBLE

All offers fail to reach government’s expectations despite Fenech’s claims of 14 interested bidders

Matthew Vella
None of the offers that poured in for the sale of the Malta Shipyards and its ancillary facilities are deemed to have satisfied government’s expectations. The 14 offers, reportedly too low to even consider selling, have effectively stalled the timing for the privatisation process. The failure to clinch a bidder is a severe blow to the Gonzi administration following intensive efforts to cut down almost the entire workforce there through hefty early retirement schemes.
Asked to comment about the low offers which government is now not considering, Finance Minister Tonio Fenech said: “Government has no comment to make at this stage of the process.”
The ministry announced with much pomp on 12 February that the privatisation unit had received 14 offers for the privatisation of the shipyards, attracting interest from European and Asian companies.
The offers, which were in response to a call for expression of interest, were split over the four areas of the shipyards: namely three offers for Malta Shipbuilding, three for Malta Ship Repair, five for Malta Superyachts, and three for the Manoel Island Yacht Yard.
But the offers appear to have failed to inch close to the kind of prices for which government is expecting to sell off the facilities.
Fenech declined to comment when MaltaToday put it to him that the offers are not being considered.
In a bid to shake off any form of commercial interest in the industry, government has paid golden handshakes to 1,567 of the entire shipyards’ workforce – roughly 96% of all workers.
The early retirement schemes were criticised by the General Workers Union, who represented the workers at the shipyards. GWU secretary-general Tony Zarb exhorted the workers not to accept the retirement schemes before they knew who the buyer of the shipyards will be.
But Fenech stood by government’s steadfast belief that the shipyards had to be downsized from 1,600 to 700, if it was to be made more attractive to prospective buyers.
Soon after, Alternattiva Demokratika asked European Commissioner for employment and social affairs Vladimir Spidla to investigate the government’s call for expression of interest in the shipyards, for allegedly breaching a European directive on the transfer of companies and their employees. The directive protects the employment of workers in an undertaking that is subject to a transfer of ownership.
Only last week, Fenech said in a statement announcing the 14 offers that “every privatisation process carried out by the government had given positive results because the private sector invested more and created new jobs.”
But shortly after the early retirement schemes were launched, workers who took up the offer were re-engaged in September 2008 to continue works on the Fairmount Marine contract.
It turned out that government had tied the early retirement scheme to a specific timeframe, so there was no other way but to grant early retirement to those who demand it and re-engage them to go on with the works.
The GWU claims the shipyards could lose up to €40 million on the Fairmount contract because of incorrect costings by the shipyards’ management. A PricewaterhouseCoopers investigation into the contract is still ongoing.
Sources had said a clause in the contract would give Fairmount the right to take over the management “in case of abandonment of contract”, forcing government to take back those workers who had just ‘retired’ to finish the contract.

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