News | Sunday, 03 May 2009

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Gonzi – shipyard offers ‘below what we expected’

Prime Minister makes first statement since MaltaToday reported in February that offers for the privatisation of the shipyards were too low

Matthew Vella
Prime Minister Lawrence Gonzi has admitted that the offers for the privatisation of the Malta Shipyards and its other facilities were “below what had been expected”.
The statement confirms reports in MaltaToday that appeared in February, which reported how none of the offers had been deemed satisfactory by government.
The offers, reportedly too low to even consider selling, effectively stalled the timing for the privatisation process after intensive efforts to pay out early retirement schemes to some 1,600 shipyard employees.
Sources privy to the privatisation process described government’s expectations to be “misled” if it was seeking to recoup the €49 million golden handshake it paid for 1,567 of the entire shipyards’ workforce – 96% of all workers at the Malta Shipbuilding, Malta Ship Repair, Malta Superyachts, and the Manoel Island Yacht Yard.
The four entities attracted 14 offers from prospective bidders, out of 52 expressions of interest.
Speaking on Bondiplus this Monday, Gonzi expressed satisfaction that some 1,000 former employees had already found another job in the private sector, calling this “an optimistic sign”.
But it was also the first time that the PM broached the subject since finance minister Tonio Fenech refused to comment on MaltaToday’s reports – a sign that government is taking the first steps in softening the blow to the process.
Gonzi declared that he is still waiting recommendations from the Privatisation Unit, after the offers turned out to be lower than they had expected. “Some look interesting but I don’t think we should accept them if they are not good… when the tenders came in, they coincided with the international situation at the time,” he said, referring to the financial crisis.
“But if I don’t like the proposals I won’t accept them. It’s an asset that is worth a lot,” he said.
Back in February, finance minister Tonio Fenech had said government had no comment to make when MaltaToday put it to him that the shipyard offers had been too low. Only two weeks before, the ministry had announced on 12 February that it had attracted 14 offers from Maltese, European and Asian companies.
He also said the criteria for the winning bid was not the financial bottom line, but primarily the “investment projections” and “the wider benefit for the economy and employment.”
An industry source had told this newspaper that the shipyard bidders had “clearly done their homework” and that expectations of offers running into “the tens of millions” for each of the four entities would be “misleading”.

Failure at the docks
www.maltatoday.com.mt/2009/02/25/t1.html

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