Local
Gloomy future for Malta shipyards
By MaltaMedia News
Jun 2, 2008 - 10:02:27 AM

As government, the management, and the workers’ union blame each other for the failure of the Malta Shipyards to become financially viable, the fate of this state company, one of Malta’s largest employers, remains uncertain, according to a report in The Motorship, a marine technology magazine.

The report says that at the end of December 2008, the EU will no longer allow Malta to give the shipyard any more financial assistance. Through a restructuring plan launched in 2002, the shipyards were scheduled to cut down annual losses, and break even by the end of this year but government sources state that 2008 will be another year of “substantial” losses for the shipyard.  

While the government sources failed to comment on whether or not the shipyards will be closed down after December 2008, it is clear that this is one of the most likely options for the Maltese government.

With its strategic position in the middle of the busy Mediterranean Sea, it is hard to understand how the Malta Shipyards never managed to be profitable, says the report. It will be equally inconceivable to think of Malta, with its long maritime history, without this industry.  

The General Workers’ Union, which represents the shipyard workers, is insisting that workers are ready to co-operate and work harder to increase productivity. But it is also questioning recent decisions made by the Executive Management – through the signing of an unfavorable two-year ship conversion contract, the Malta Shipyards is risking losses of over €46.59 million (Lm20 million), the GWU stated.

The financial feasibility of the ship conversion contracts which the executive management signed during the last years is one of the reasons why the union is calling on government to publish detailed financial information on the shipyards. Earlier this month, government announced that in December 2007, it asked PriceWaterhouseCoopers to investigate the ship conversion contract. Almost six months later, the investigation is still underway.

But government is blaming the Shipyards’ failure on other matters. Workers are not productive enough for the shipyards to be competitive. Due to this, work is not finished on time, or else is not carried out properly and has to be redone, government accused the union.

On Monday, the union insisted that government should show taxpayers, who have been subsidising the shipyards year after year, the full details of the ship conversion contracts. “GWU insists taxpayers should get to know all the facts – including the reasons why the Malta Shipyards accepted certain conditions in the ship conversion contracts which are not acceptable to any other shipyard. The union is certain that the greatest losses incurred by the shipyards were caused by these contract conditions. There are also other matters indicating lack of financial control at the shipyards.”

The union agreed with government that great efforts from all those involved are required to save the shipyards. Workers are ready to share in this effort, but they cannot accept a restructuring process aimed at giving away the shipyards’ most profitable operations to subcontractors, to reduce the current workforce and use workers with inferior conditions instead.  

According to the GWU, the most crucial step towards the restructuring of the shipyards is the appointment of a credible management that is ready to work hand in hand with workers’ representatives and publish all the information which the workers have a right to know.