The Maltese government has privatised all of the maritime services with the final privatisation process of Tug Malta Ltd. After a new collective agreement was reached, the government sold its share of Tug Malta to the Italian company Rimorchiatori Riuniti SpA for €24.7 million. The privatisation process was described as a positive one leading to increases in wages, better working conditions and a 10-year job guarantee.
The government has privatised Tug Malta Ltd, the only licensed company that can carry out towage operations within and between the harbours of the Maltese Islands. In May 2007, the government announced the preferred bidder for its shareholding in Tug Malta, namely the Italian company Rimorchiatori Riuniti SpA (RR), operating towage and harbour services in the ports of Genoa in northern Italy and Salerno in southwestern Italy. It was reported that the government wanted to sell its 73.72% share of Tug Malta to obtain a strategic partner to help the company diversify its services.
New collective agreement signed
In July 2007, a new collective agreement was signed between Tug Malta and the Maritime and Aviation Section of the General Workers’ Union (GWU), the union representing Tug Malta employees. The new three-year agreement aimed to pave the way for the imminent privatisation of the company. The negotiations were carried out with the intention that the new agreement would be reached before privatisation; the objective was to save all jobs and maintain the employees’ existing working conditions. The new agreement stipulates an increase in wages, better working conditions and a 10-year job guarantee.
Italian company buys government share
Thereafter, on 18 July 2007, the government sold its shares to RR, thus finalising the privatisation of Tug Malta. RR was set up in Genoa in 1922. The company has 22 tug boats and has registered an average profit of €18 million annually between 2002 and 2006. During a press conference on the privatisation exercise, the Minister of Investment, Industry and Information Technology, Austin Gatt, announced that the government’s share of Tug Malta had been sold for €24.7 million. Minister Gatt expressed his satisfaction with the deal as the government’s share of the company was sold for 3.4 times its net asset value.
Plans for further investment
This privatisation process was described by the actors involved as an all-round deal. RR agreed to invest a minimum of €22 million in two new tug boats over the next five years. The President of the company, Giovanni Delle Piane, stated that he is committed to investing in and developing harbour towage, offshore towage and international shipping. The company shall also purchase equipment in order to upgrade some of the existing tug boats to make them more versatile. Furthermore, RR agreed to give the necessary support to the local maritime institutions for the training of sea cadets. The company also committed itself to employ locally trained cadets.
Commentary
The privatisation of Tug Malta was another step in the restructuring and privatisation processes being carried out by the Maltese government. Unlike Sea Malta (MT0512102F), this process was successfully concluded for all the actors involved. The privatisation of Tug Malta was particularly relevant to the country as Malta is highly dependent on its ports due to its island status.
Christine Farrugia, Centre for Labour Studies