Shipyards to be liquidated

The privatisation of the shipyards in Malta will eventually lead to the company’s liquidation, a prospect that only came to light yesterday in a report published by the European Commission. In its spring economic forecast the Commission said one of the reasons why it expected the public deficit to drop in 2009 was because the shipyards will be liquidated. The Finance Ministry yesterday confirmed the matter insisting that Malta Shipyards was not for sale but its business and assets were.

It pointed out that privatisation “contemplated” the sale of four distinct operations: the shipyard facilities, the shipbuilding Marsa facilities, the super yachts facility and the Manoel Island yacht facility.

A ministry spokesman said the Commission forecast reflected the fact that the government “will not have to suffer any more losses due to shipyard operations”.

“Malta Shipyards Ltd, which is the company currently in operation, is not for sale but its business and assets, by way of a concession, are. This implies that at some point MSL will be wound up, as the new operator will not be required to assume its liabilities,” the spokesman said.

It is unclear whether the company would still be liquidated if the privatisation process fell through. The issue of liquidation had been a bone of contention between the government and the Commission in September last year. Brussels had made it clear that the government’s intention to fork out a further ?100 million to cover the yard’s losses incurred by the end of 2008 would amount to state aid.

The privatisation process was put in doubt in February when it was reported that the 14 bids fell far short of the government’s expectations. Nonetheless, the ministry recently insisted the privatisation process was “still underway”. The Prime Minister has stated that there had been interesting offers and others which were not. He had further stated that the government would follow the advice of the experts and the final decision taken would be in the national interest