Sale to speculators 'would have made more money'

Selling the land used by the Malta Shipyards for speculative purposes would have fetched a higher price but the government wanted to protect the industry, Investments Minister Tonio Fenech said.

He was reacting to a story in MaltaToday which claimed that Neapolitan firm Palumbo would be paying only €5.7 million for the ship-repair yard in Cospicua.

Last week Mr Fenech said in Parliament that talks with Palumbo were in a relatively advanced stage and yesterday was hopeful of a successful conclusion.

He would not confirm or deny the MaltaToday report yesterday but insisted: "If we had to sell the property for speculative purposes we would get much, much more than what we would expect to get for a ship repair facility, which traditionally in Malta has only lost money."

The government has bound bidders with having to operate the shipyards for maritime-related activities, which, Mr Fenech said, clearly had an impact on the price.

The Sunday newspaper said there was a possibility of entrenching the superyachts facility in the deal.

Quoting the article, Labour leader Joseph Muscat yesterday said the government was being offered "an insignificant sum" for the ship repair facility because it had given early retirement to everyone.

But Mr Fenech argued that it was precisely the early retirement scheme that made negotiations possible. The shipyards had 1,700 people but all except 50 had taken early retirement.

"The shipyard was overmanned and nobody was going to offer any money and invest in an enterprise in which they would lose money because it had too many people," he said.

Reacting to Dr Muscat's comment, Mr Fenech's ministry yesterday issued a statement saying the PL leader's speculation went against the national interest and that of workers.

"He ignored the fact that the shipyard's privatisation meant the creation of more productive jobs in the country," it said, adding that negotiations were at a crucial stage but political speculation seemed more important for Dr Muscat than their successful conclusion.

The privatisation of the four sections of the shipyards was set in motion in June 2008. The first call for expressions of interest closed four months later but there was a disagreement over the process between the European Commission and the government, particularly over Malta's insistence on offering the shipyards exclusively for the maritime industry. Late in October, a second compromise call was issued which retained that proviso but widened the offer to include all maritime sectors and not just ship repair and shipbuilding.

Last May the three consortia that had bid for the ship repair facility had been asked to increase their financial offers and improve their business plans. Back then, Dr Fenech had told The Times that an assessment of the financial offers found them to fall below the levels that the government had been expecting. He had said that while it was preferable to sell the ship repair facility immediately, the government was willing to put the sale on hold if no acceptable offer was made.

However it seems that the government is not willing to wait any longer. Asked whether he would put the sale on hold to get a better price, Mr Fenech said the negotiations were in the final stages and there were indications that they would be successfully concluded.

A total of 14 bids were received, of which three were for the ship repair facilities, five for Malta Super Yachts Facility, three for the shipbuilding facilities and three for Manoel Island Yacht Yard. Last November, bidders for the Malta Shipyards Ltd's super yacht facility were asked to submit fresh proposals because their first offers were considered unsatisfactory.