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It’s a bold plan indeed

By Kurt Sansone

If the Marsa and Bormla shipyards restructure according to the plans laid out by the Drydocks task force in seven years’ time the companies would see their combined turnover almost double, government subsidy would go down by Lm14 million and the workforce would be more than halved.

The plan is an ambitious one indeed and despite the resolve government has shown to tackle the problematic shipyards there is an amount of scepticism circulating in private sector circles.
The restructuring exercise is intended to kick off as early as the beginning of next year with the launching of a number of early retirement schemes intended to reduce the workforce. If everything goes according to plan more than 1,400 workers are expected to take up the various retirement schemes in the next three years.
However, the report states that government prefers the schemes to open and close during 2002. The schemes would cost government more than Lm19.3 million. The government agency MIMCOL is expected to draw up the details of the retirement schemes, which will be tailored according to the age of the employees.
The Marsa Shipbuilding and the Malta Drydocks currently employ a total of 3,550 workers, which makes them on of the biggest shipyards in Europe. The vast majority of European shipyards employ less than 1,000 people with the average number of employees reaching 500.
A bone of contention will certainly be the clause stating that management has the right to refuse somebody taking up early retirement. This clause was inserted to prevent the yards’ best employees from leaving, however the criteria for refusal have not been set.
The restructuring plan lays out a number of financial and human resources targets, which should be reached for each of the next seven years. In its reaction to the report government acknowledged that the targets may not be met and if this occurs, workers might have to work a reduced working week.
The financial projections presented by the task force show that the yards would make a meagre profit of Lm200,000 by 2008 by when government subsidy would be reduced to a mere Lm2 million.
The yards are expected to diversify their work into ship repairs and conversions, ship hull building and yacht repairs.
The wider global scenario is not very helpful to the yards, which makes the restructuring exercise all the more an urgent necessity. The fourth report issued by the EU Commission on the situation on world shipbuilding clearly indicates that South Korea is the largest shipbuilding country in the world. Although last year EU shipyards saw an increase in ordered tonnage, this is not expected to occur again because the increase resulted from new cruise liners.
The cruise liner market is now on the decline, more so after the tragic events of 11 September.
This foreign perspective clearly shows that Malta Shipbuilding has practically no future ahead of it unless it merges with the Drydocks and both yards act flexibly and on a broader industrial basis.


The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt