Does Malta need to save its Drydocks?

The question of how Malta should deal with its floundering Drydocks has long been the subject of discussion.

That the docks has debts of millions and continues to operate only because of huge government subsidies is indisputable.

The problem has always been how best to deal with the beleaguered ‘yard.

The difficulties at Malta Drydocks have long been in place, but they came to a head due to the government’s decision to pursue European Union membership because of the EU’s strict rules on state subsidies.

In fact, it was widely recognised that the future of the Drydocks would be one of the issues that would need thrashing out during negotiations with the EU. The Drydocks have historical links with the Labour Party and the fact that EU membership would inevitably necessitate a radical overhaul at the ‘yard has politicised it as a subject even further.

However, the ‘yard and its problems were put under the microscope prior to the start of EU negotiations, most notably in the Appledore Report, which was commissioned under Alfred Sant’s government.

And Dr Sant has made it clear that he recognises the need for change at the Drydocks, such as considerable decreases in state subsidies.

Who knows whether it was because the government realised it needed to get the public on its side, but some cleverly-phrased figures conveniently found their way into the press, serving the purpose of making taxpayers stop and think about just how much it was costing them to fund the Drydocks. Especially when work was scarce and the outlook bleak.

Resentment began to surface and this peaked early last year when the employees questioned whether they should work on an American warship– the US La Salle. The General Workers’ Union argued that the Constitution’s neutrality clause meant the work should not be done. But growing pressure in the face of a work crisis led to the Prime Minister taking a firm stand. Dr Eddie Fenech Adami’s significant decision to go on national television and announce that if the Drydocks didn’t take the work the government couldn’t guarantee the ‘yard’s subsidies brought things to a head.

The Prime Minister appeared to have the backing of the nation and the GWU – known for its militant action – seemed to bow to pressure, agreeing to do the work on that particular occasion, but stressing it wanted the anomaly in the Constitution thrashed out.

Late last year, a task force was set up to try to work out the best way forward for the Drydocks.

The task force, chaired by Social Policy Minister Lawrence Gonzi, made a number of proposals for turning the Drydocks around, including cutting the workforce by 50% within seven years, doubling the turnover and the removal of almost all government subsidies.

One idea put forward, which was taken on board by the government, was the proposal of early retirement schemes.

The schemes, which have been met with caution by the General Workers’ Union, opened for offers at the end of January.

The workers have until the end of May to make their decision, although the lump sums they are being awarded will decrease on a monthly basis between February and May.

The GWU has only said it is urging workers to weigh up the pros and cons of the scheme and will not tell them what to do. The section secretary Tony Coleiro, however, speaking in his personal capacity, made it clear that he didn’t agree with the schemes.

He admitted that a number of 56-year-olds and over may be tempted to take up the offer, but pointed out that he didn’t feel tailoring was the best way forward for the ‘yard. The biggest mistake, he said, had been the decision to close the apprenticeship schemes.

GWU secretary general Tony Zarb is also on record as saying that he would much prefer to see more work brought to the Drydocks, rather than downsizing. He has highlighted the fact that consultants are being paid to work out how to do just this.

In the meantime, the fate of the Drydocks hangs in the balance, while the government prepares to write off debts amounting to Lm276 million.

The industry might be floundering - the question is whether it, along with its debts, will be written off, or whether it will be restructured in a bid to make it a viable entity in today’s new economy.