Transport Malta grants new direct order at former shipbuilding site

Transport Malta has confirmed that a private company is using the former Malta Shipbuilding site in Marsa for the temporary berthing, repairs and maintenance of semi-submersible oil rigs.

MaltaToday understands that this another concession to a private company awarded without a public competition.

The authority has however explained that the site “does not fall under the sole remit of Transport Malta”.

TM executive chairman James Piscopo said the concession was “a typical positive case where different government entities collaborated proactively, in seizing an imminently realisable opportunity that could have been missed if we did not act promptly.”

Echoing previous statements justifying a direct order to another private company for the use of the Outer Coal Wharf in the Grand Harbour, Piscopo added that this decision “not only brought about economic benefits but also put Malta solidly on the map, sending the message that it can also excel in the oil rig repairs sector at a time where activity in the Mediterranean is picking. Had we not acted together and fast, this opportunity would have been lost”.

Last month, MaltaToday revealed that TM awarded a lucrative direct order to Melita Shipyards, incorporated just two weeks after the March 2013 elections, for a floating dock at Outer Coal Wharf.

However, the new direct order for the shipbuilding site was not issued directly by Transport Malta, the authority told MaltaToday.

“This was a proactively coordinated effort between various ministries and government entities, whereby a previously derelict area was allocated for a temporary period between 4 November 2013 and 31 July 2014 to a local operator to capitalise on an imminently available opportunity in Oil Rig Repairs,” Transport Malta said.

The concession is for the temporary berthing, repairs and maintenance of a semi-submersible oil rig and also includes storage facilities.

“While government entities are reaping the benefits of thousands of euros per day in rent fees and the applicable statutory port dues, the economy at large is reaping economic value added from the multi-million euro budget available, across the whole maritime cluster, transportation, supplies and hotel accommodation sectors”.

The project, the authority added, “not only brought about investment in the derelict area, but also already generated employment”.

MaltaToday is informed that the direct order was awarded to Ableman International Limited, owned and controlled by Paul Abela, which offers repair and maintenance services of oil rigs.

This direct order has raised eyebrows among the shipping and servicing sector, especially since the shipbuilding site has been earmarked for a multi-million project which should see the derelict site turned into a maritime hub.

It is not known whether the company which was awarded the direct order is among the companies who submitted a bid for the development of the former shipbuilding site.

However, TM has reassured that the temporary concession would not interfere in any way with the privatisation of the former Malta Shipbuilding site, because the concession would end before the maritime hub project physically starts.

In February, Economy Minister Chris Cardona had said that government received 45 expressions of interest for the development of the maritime hub on the 175,000 square metre site.

The applications include 28 international expressions of interest, with 11 bids proposing the development of the whole site and the rest proposing the development of part of it.

Speaking in Parliament, Cardona had noted that government was in the process of issuing a call
for proposals.

Floating dock

A private company recently filed a judicial protest against Piscopo, for unilaterally granting the lucrative permit for a floating dock without issuing a call for tender or an expression of interest.

Woman In Management Ltd demanded that TM repeal the concession it gave to Melita Shipyard, which it claimed was in breach of competition laws.

The company said it could have possibly shown interest in the regulator’s contract, but that this was not published and therefore prevented them from competing for it.

Piscopo had confirmed with MaltaToday that Melita was directly awarded the permit “because this was an immediate, realisable opportunity that ought not to be missed”.

He said the operation was expected to generate a turnover in the region of €10 million annually, and have a spillover effect for subcontractors and related services.

The 12-month agreement was similar to other agreements for use of other port areas, and renewable subject to the success of the operation and at TM’s discretion. The operator is bound by a series of long-term conditions, including the engagement of four apprentices for three consecutive years, and a €4 million investment in infrastructure, equipment and upgrading of the area.