Ship repair – it’s not pastizzi and fenek

Published: May 30, 2010 at 10:48pm

HMS Camperdown at the Royal Navy Dockyard, Malta

HMS Camperdown at the Royal Navy Dockyard, Malta

The prime minister said in parliament a few days ago that listening to the Opposition talk about the drydocks is a surreal experience, because the Opposition sounds as though it lives in another world.

He spoke as the House prepared to vote on the transfer of Malta’s ship repair facilities to the Italian company Palumbo.

Even as Greece collapses, he said, those facing him on the other side tried to justify what happened with the drydocks over the years.

What happened was this: the country carried the drydocks for so long, and to the tune of so many hundreds of millions, that it is the single greatest example of throwing good money after bad in the history of our economy, and by a long, long shot. It is Malta’s Billion Lira Disaster.

The dockyard was never intended to be a commercial enterprise, and it was not planned as such. The Royal Navy needed ship repair facilities in the Mediterranean and this was the place to put them. If something went wrong in the Middle Sea, it was a lot easier to sail into Grand Harbour than it was to sail to Portsmouth.

The yard wasn’t conceived as a money-making venture but as the equivalent of an on-the-premises mechanics’ workshop in a car hire company. It was the Royal Navy Dockyard, Malta. In the days before labour laws, people were hired and fired as needed. A ship came limping in, a call went out for labourers and skilled tradesmen, they did the job, got paid in pennies or shillings, the ship sailed out and the labourers and skilled tradesmen went on their way to look for other work.

This is a much simplified version of how things were, but you get the picture.

When Britain’s lease on its military base here expired at midnight on 31 March 1979 (which would make Jum il-Helsien April Fool’s Day), the greatest fear was that the dockyard would have to be shut down because it had become redundant. Its main purpose was no more.

Dom Mintoff had built up the departure of the British navy into a great political event. He didn’t tell his followers that Britain’s lease had expired and that they weren’t renewing. He told them that he had kicked the British out – and his supporters, most of whom were illiterate or otherwise ignorant at the time (never forget how new Malta is to literacy) believed him utterly.

Because he had sold to the masses the departure of the British navy as his personal achievement, Mintoff was especially keen that there be no negative consequences, but only massively positive ones. Catastrophic economic consequences were particularly undesirable. He didn’t have a game-plan for economic restructuring which would mop up the resulting unemployment, the main fear rippling through the country.

Mintoff’s supporters may have hated the British on political principle but loved them in person, and it can be said safely that nobody loved a sailor as much as the people of Mintoff’s home town and the core base of the Labour Party’s support. They jammed the bastions on 31 March 1979, weeping copiously as the last ship sailed out, shouting ‘Goodbye, we love you!’ and waving madly. The navy kept shops, bars, and jobbing workmen afloat, and that is quite apart from the fact that there were many romances indeed.

It was easy to say ‘I kicked out the British’ but a lot more difficult to come up with a plan for the dockyard. People in Malta in those days, like the Greeks until their economy cracked, thought that the government and is-sinjuri had an unending supply of money which recreated itself indefinitely.

The sinjuri – and heaven knows there were few of them back them – could be taxed and Mintoff is-Salvatur ta’ Malta could dig into his kaxxa and pay dockyard workers for the remainder of eternity even if they sat about doing nothing for most of the time and never went into profit or broke even.

And yes, that’s what happened. Mintoff could not sell the departure of the British as an unqualified success and personal achievement to go down in history if he also had to run down the dockyard and then close it completely. So Malta’s back was almost broken over the years by carrying this terrible burden.

With such a large workforce, and using systems designed for a naval yard and not for a commercial one dealing with merchant ships and private yachts, the dockyard could never make money – no matter how productive it was and how many ships came in. It was impossible, doomed to failure from the start.

It is a failure that has been protracted tortuously over 30 long years – three decades during which money has been siphoned from the taxpayer, money that could have been spent instead on development and investment, so many millions that they can no longer really be counted.

On early retirement schemes alone, to hive workers off and make the yard saleable, the government has spent €50 million. Two thousand men took advantage of the schemes and left the yard’s employment, but 1,300 have been left on the payroll and it should be 700.

In the eight years between April Fool’s Day, 1979 and the departure at last of the damnably miserable Labour government, there was never any money for schools, for tertiary education, for reverse osmosis plants, for telephony or for a power station, but there was always money for the dockyard.

Even after the dockyard workers had welcomed the new government by going on the rampage in Valletta, that new government thought it best to keep things going, trying to restructure, trying to find business, trying to do this and that – don’t rock the blessed boat.

Eddie Fenech Adami was many things, but he was no Margaret Thatcher and he wasn’t going to take on the union or the dockyard. Instead, he did the next best thing, and revved up the country’s economy so that we all earned more and the burden of carrying that sack of rocks would not be as great, in relative terms, as it had been before. And there was money for other things after the yard workers’ cheques had been drawn.

At one point in recent years, the dockyard had an accumulated debt of Lm300 million (around €700 million). The government decided to absorb this debt, which raised Malta’s deficit to 10%.

Now the prime minister has said in parliament how deeply he regrets the fact that some decisions about the dockyard were not taken earlier, when the international economic situation was better. The European Union, when we joined, had agreed that state aid to the dockyard would be permitted for seven years but no more.

Those seven years are almost up, and given that the yard still hasn’t struggled to its feet and has no hope of doing so in so short a time, it had to be sold and the best of luck wished to any buyer who could be found, given that the market for European shipyards isn’t burgeoning. The government first thought it might negotiate for an extension of the permissible period for state aid, then decided to do what should have been done in 1979, and lance the wound.

A buyer was found and the Opposition, of course, objected – first because the yard was being sold at all, and then because of the price at which the deal was struck. One was tempted to say, look, if you’re so damned keen, pool your resources with Tony Zarb and buy it yourselves.

Joseph Muscat even went so far as to say that the government is selling the dockyard as an act of vengeance on the Labour Party. But Muscat and his men ignore the fact that had a buyer not been found, the prospects would have been far worse. With no state aid, the dockyard would have to be declared bankrupt and 1,300 men would lose their jobs overnight, with no plan of action to suck them into alternative employment.

There was an international call for tender offers for the purchase of the yard, overseen by the European Commission, which specified that the scope of activities of the yard could not be restricted to ship repair but must cover the wider ‘maritime activities’. So ship repair may yet cease altogether.

The Labour Party is hysterical at the thought. Perhaps it imagines that ship repair is like pastizzi and fenek – a local tradition which has to be preserved at all costs, the difference being that there’s a market for the first two.

The Labour Party, unable even to organise the proverbial in a brewery, seeks to convince that it would have done things better, not sold the yard at all, kept those people on, somehow made money and failing that, kept the place as a sort of shrine to ship repair, pulling money out of the national health budget and education to fund it.

Given that the Labour Party is the original source of the problem, I think it should be told in no uncertain terms to sit down and keep quiet. Do you really want Anglu Farrugia’s advice on the shipyard? I don’t think so – though he might yet discover some stolen Labour votes hidden in a welding station.

This article is published in The Malta Independent on Sunday, today.