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Welcome recovery in ship repair

Date: 18/01/2016

The ship repair industry has had a substantial impact on Malta’s economic, political and social life for more than a century. In colonial times there were years when it employed about 30,000 workers, especially between the two world wars. More recently, the numbers were reduced to less than 2,000 however, unfortunately, this massive restructuring still did not guarantee the continued existence of the shipyards industry on a large scale.

When the EU-approved restructuring plan aimed at making the shipyards economically viable without the need of State aid failed, it was mainly because the massive cultural change that was required to make the shipyards economically viable was not achieved.

Protracted bickering between the different stakeholders, an endemic sense of dependence and entitlement by the workforce and their representatives as well as some significant commercial mistakes meant that privatisation of the shipyards was the only way in which this industry could survive.

This privatisation came in the form of the Italian Palumbo family being given a substantial footprint in the yard’s six docks and vast areas of workshops that used to provide work for thousands of men. It was inevitable that, sooner or later, neither the EU nor the Maltese government could continue to tolerate the pouring of taxpayers’ money to keep the yard going. Eventually, in 2008, the ship repair industry in this country passed in the hands of private operators.

One of the most significant effects of the privatisation of the shipyard is that, today, one rarely hears about this industry in the media. Turbulent industrial relations are a thing of the past and the political clout that was once exercised by the workforce and their representatives no longer exists. So it must be good news to hear that the new operators are registering a “small profit”.

The revival of the ship repair industry is most welcome even if one should not become too euphoric about this success. The economic value of the vast stretch of land dedicated to the ship repair industry in Cottonera has not been estimated realistically. It is possibly the only land left in the harbour area that could have alternative uses for tourism or other maritime ventures. A cost benefit analysis on the use of such scarce land in the harbour area is, therefore, called for if we are to optimise its economic potential.

The revival of the ship repair industry will always be welcome, even if today it only employs about 150 local workers. It will always be debatable whether the ambition of the new operators to make the Maltese shipyard “the best in the Mediterranean” will ever be realised, though, of course, one would wish them the best of luck. Millions of euros may have been invested in the shipyard but these heavy industries require hundreds of millions of investment.

A more modest ambition, but one which would really add considerable value to the Maltese economy, is the contribution that the shipyard could make to train workers in highly specialised skills that the old shipyard was so good at providing.

A distinct loss the Maltese economy experienced with the demise of the old shipyard industry is the flow of experienced tradesmen that honed their skills in the Cottonera workshops.

The revival of ship repair will never be a renaissance of this industry but it is still a most welcome addition to the range of viable economic activities. As long as the new private operators continue to add value, then it will be an important contributor to Malta’s prosperity.

Source: Times of Malta

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