Restructuring of Malta Drydocks and Shipbuilding

In November 2003, the state-owned Malta Drydocks and Malta Shipbuilding were restructured after lengthy negotiations between the government and the General Workers' Union (GWU). A new merged company has been created, known as Malta Shipyards, and there will be no compulsory redundancies among the 2,600-strong workforce.

The state-owned Malta Drydocks and Malta Shipbuilding have long been in the news. During the British colonial period, the dockyard was the cradle of industrialisation in Malta, employing a large proportion of Maltese workers. However, during recent decades, it has not been viable and accumulated a debt of MTL 300 million (EUR 644 million). During Malta's EU accession negotiations, it obtained a five-year transition period within which to phase out state subsidies to the shipyards.

Marathon negotiating sessions between high-level government representatives and officials of the General Workers' Union (GWU) - Malta's largest trade union - finally resulted in Malta Drydocks and Malta Shipbuilding being dissolved on 5 November 2003 and their assets and liabilities transferred to the government. A new company, called Malta Shipyards, will absorb 1,700 workers from the current workforce of 2,600 under new conditions, including the introduction of a shift system which will substantially reduce overtime. The company will rent dockyard facilities from the government. Nearly half (418 out of 900) of the workers evaluated by the management to be surplus have accepted early retirement schemes. The remaining workers have been absorbed by another new company, called Industrial Projects and Services Ltd, and posted to the civil service and public-private partnerships.

This restructuring of a parastatal body was the first of its kind. No previous Maltese government had ever undertaken such complex and risky task. GWU claimed the negotiations as a success, as the unavoidable restructuring programme did not lead to any forced job losses.