23 - 29 December 1999

Major changes ahead at Malta Drydocks

On the same day that Malta Drydocks signed an agreement with the US Navy, Franco Aloisio spoke to chairman Noel Zarb Adami on his future and that of the Maltese shipyards

Prof. Zarb Adami, what is the significance of the agreement signed between the Drydocks and the US Navy, in which auxiliary ships of the US Navy can be repaired in Maltese docks? Do you consider it a historic day for the Malta Drydocks?

I think that times have changed quite considerably over the last seven to eight years. Nobody could ever have predicted the fall of the Soviet Union at such a rapid rate. Markets have opened up and every activity has become globalised. Now one has to look at the position of the Malta Drydocks within the existing industry, and how it will change in the very near future.

I think that today's agreement is historic not only because we have opened up a new market, but also because it reflects a change of attitude. Malta Drydocks is now very active on the global market. It is no longer expecting "friendly" countries to give work to the 'yard, but we are equally competitive with all the 'yards in our region such as in Palermo, Lisbon and Marseilles.

The agreement with the US Navy came after a major change in policy by the Malta Drydocks council. Will this shift be the first of a long series of changes such as the proposed merger of the Malta Drydocks and the Malta Shipbuilding?

There are several changes ahead at the two shipyards. The joining of the two boards of the Malta Drydocks and Malta Shipbuilding is an exercise to converge the two companies. Once this convergence is in place, the two companies will still be having several distinct functions. The process is one whereby the assets of the two companies will be looked at as complimentary to each other. These assets could then be used in the core ship building and repair business, and applied also in the enterprises section which would include a steel structure unit.

The merger in the terms of company law is something to be aimed at. However Malta Drydocks and Malta Shipbuilding will be first merging and will then create spin offs from their assets. This, I think, is the strategy which will have to be adopted.

What will be the set up of the boards of the two companies?

The idea is that the Malta Drydocks will have a proper board of directors, and not operate as a council, with one elected worker and not four as it was in the last three years. We had a situation of workers' domination, rather than workers' representation. In today's world we need a much more focused board of directors with an interest in the future, and not the immediate present.

The new corporate structure of the Malta Drydocks should come into effect around the 10 to 17 January, following the amendment of the Drydocks Act. The next step is for the minister to appoint the members of the boards of the two companies. This is expected before March. The two boards will be composed of, more or less, the same members and with a common chairman. Each board will have one worker director.

Following these changes, a strategic plan will have to be developed.

How are your relations with the GWU?

In the past and present I have had good relations with all the secretaries general of the union. The union is there to see that there is health and safety at work and that the workers do not suffer from any injustices, while making sure that the workers get what they deserve.

My general vision of the GWU within the Drydocks is one which excludes them from day-to-day management. Unfortunately the habit within the 'yard has been one of enforcing change because of union activities. The union has a habit or ordering and not discussing. Moreover they criticised me for not being available and of being abroad too often. I have to say that this year I have spent 66 days abroad trying to get work for the Malta Drydocks. However, I am always available within 24 hours.

A chairman also has other things to do apart from being at the back and call of a trade union. I cannot understand the attitude of the GWU Drydocks Section Secretary, Anthony Coleiro. I have always placed the interest of the Drydocks first and foremost, and if there is a better chairman that myself I would be ready to give him my post anytime.

Two years ago you had told The Malta Independent on Sunday that the Drydocks was losing Lm45,000 a day. What is the 'yard's financial situation today?

There has been no improvement in the financial situation of the Drydocks. However there was a better improvement last year. This year alone we have lost Lm15m, the amount equivalent to the government subsidies given to the Drydocks.

Despite this financial situation, things have changed considerably in the sense that there is a higher activity at work and the Drydocks is better organised.

Moreover, we are finalising the collective agreement. However there has been a general downturn in ships going in for drydocking. We hope that next year will be a better year, especially after the agreement with the US Navy.

Is the Malta Drydocks planning to enter into a strategic alliance or partnership with foreign companies?

We are looking for strategic partners for the Enterprises section of the 'yard, both from Malta and abroad. The Enterprises section will also encompass the Manoel Island yacht repair facility, the development of number one dock and the steel construction unit.

We have a major problems in the Enterprises section. First of all it is very difficult to convince people to change the nature of their work. Secondly, to create stand alone units, you need the appropriate financial and accounting workings.

For this purpose, in the coming weeks a new computer system should be operative for both the Malta Drydocks and Malta Shipbuilding. This software will be used for planning, payroll and also to follow up on the activities of every person in the shipyard.

Your contract as chairman of Malta Drydocks ends this month. Will you be reappointed chairman?

I have just been informed by Minister for Economic Affairs, Josef Bonnici, that my contract has been renewed until further notice. However I have an understanding with the minister to leave in the early months of next year, after the series of changes are implemented. In the meantime I have been appointed chairman of the Malta National Laboratory.