Fairmount contract ‘deliberately devised to ruin shipyards’ – Sammy Meilaq

The General Worker Union’s former secretary of the Malta Shipyards has told the Permanent Commission Against Corruption that the shipyards’ management had paid damages for the controversial Fairmount conversion when it knew this would ruin the company.

The former shipyards chairman gave a sworn statement to the anti-corruption commission after the GWU sent a copy of a report by the audit firm PricewaterhouseCoopers and its own report which it gave to the Commissioner of Police and the Auditor General.

Meilaq was categorical in his accusation that the Fairmount fiasco was deliberately concocted to ruin the shipyards, and tantamount to corruption.

The Fairmount conversion contract cost MSL over €36 million and was acknowledged by the government as the main reason for the shipyards’ failure to achieve financial sustainability since its debt was cancelled in 2003.

In his affidavit, Meilaq said the shipyards management had entrusted Graham Couser with drawing up the contract for the conversion contract, and later released Couser from any contractual obligations making it easier for the consultant to abscond from Malta. Couser was the other signatory alongside Malta Shipyards CEO Chris Bell on the contract for the works on the Fairmount’s semi-submersible barges Fjord and Fjell.

Meilaq said MSL accepted to pay damages on the contract “against all accepted norms and practice as well as the experience of such contracts, to the enormous financial detriment of the shipyards.”

He said the shipyards had allocated millions in sub-contracting without any public tender or quotations, documentation or evaluation, as well as accepting higher fees for the work than it was receiving from the Fairmount conversion.

He also accused MSL management of having changed the documentation on the conversion expense to give the impression the money was spent elsewhere, and then passing on false information to the GWU on the contract’s terms. “In its account, MLP registered a €1.24 million spend on training that did not exist,” Meilaq said.

Meilaq added that MSL knowingly paid its subcontractor damages that it was not obliged to pay, and that it knew would lead to its financial ruination. “The management did this instead of taking steps to protect the shipyards’ interests as it was obliged to do.”