Tug Malta privatisation fuels race for port towage licences

Maltese companies with a history of port activities plan to apply for a licence to operate towage and salvage services once Tug Malta is privatised, industry sources have told The Sunday Times.

"There are a number of highly experienced Maltese companies with a long history of running port operations and are well set up to provide the level of towage and salvage operations Malta needs and might need in future. These can harness the necessary resources and expertise to run such a service too," the sources said.

The government kicked off the process to sell its 74 per cent stake in Tug Malta last October.

Eleven highly reputable companies in towage and salvage operations have signed a confidentiality agreement with the Privatisation Unit and collected the Request for Proposals document.

It is not clear if the government is selling Tug Malta as a monopoly, but the sources said they doubted that such a monopoly could be allowed under EU rules.

Tug Malta was nationalised out of a number of companies that used to run towage service before 1980. Up to the late 1980s all tugs were based in Grand Harbour, but, in 1989, with the development of the Freeport, the company had to invest in more tugs for that port.

In the last three years, the company underwent restructuring to enable it to provide harbour towage in Valletta and the Freeport round the clock.

This year, Tug Malta took delivery of two new tugboats but needs to renew its fleet if it is to expand into international markets.

The privatisation process began to encounter hitches after the General Workers Union said it was not ruling out industrial action if Tug Malta failed to reply to its proposals on the employees' new collective agreement.

The Investments Ministry has accused the union of deliberately trying to scupper Tug Malta's privatisation. The ministry said the company's management had called on the union to enter into negotiations over the collective agreement a year ago. However, the GWU only presented its proposals to the management last November.

The GWU's threat to resort to industrial action had nothing to do with Tug Malta's collective agreement but was linked to the fact that the company was in an advanced stage of privatisation, the ministry said.

"Just as it behaved during the whole Sea Malta episode, the GWU is intentionally pursuing a strategy to disrupt and, if possible, stop the privatisation process," the ministry said.