Melita Shipyard…The riddle continues

In May 2014, James Piscopo, CEO of Transport Malta, had confirmed with MaltaToday that Melita was directly awarded the permit “because this was an immediate, realisable opportunity that ought not to be missed”. He said the operation was expected to generate a turnover in the region of €10 million annually, and have a spill over effect for subcontractors and related services.

The 12-month agreement was similar to other agreements for the use of other port areas; renewable subject to the success of the operation and at TM’s discretion. The operator is bound by a series of long-term conditions, including the engagement of four apprentices for three consecutive years and a €4 million investment in infrastructure, equipment and upgrading of the area.

Fast forward 27 months and mystery still shrouds this concession, with Minister Joe Mizzi, in a momentous parliamentary gaffe, bizarrely referring Parliamentary Questions regarding this issue to the Minister ‘concerned’. Transport Malta has on various occasions not answered questions regarding this concession and a similar one to Ableman Group.  Why is it so difficult to quantify the investment done by this company attributable to a direct concession given by an Authority?

The financial statements as at 31 December 2014 of Melita Shipyard Limited do not report any revenue. This means that 7 months after the concession Melita Shipyard was nowhere close in delivering the promised effects.  The Balance Sheet of the company leaves much to be desired as well. The company reports total assets of Euro 2.3 million. At face value this may look positive although nowhere close to that promised by Transport Malta. However, when one analyses the accounts of said company it transpires that some Euro 2 million are a lease given to a related party; Melita Power Diesel. In substance it seems that the company borrowed the money to purchase the floating dock which it leased to Melita Power Diesel.  Melita Power Diesel has filed the abridged version of the financial statements with the Registry of Companies. Consequently, one cannot deduce whether there was added revenue or profitability. The increase in retained earnings from 2013 to 2014 was of Euro 60 thousand.  However, in 2014 the company incorporated the operations of two other related companies. This renders impossible the analysis of whether the targets mentioned by James Piscopo  were in reality met or not.

Interestingly enough, in the notes to the financial statements of Melita Shipyard, management states that it expects to renew the lease to the related party for another 5 years. This is probably under the assumption that Government will renew the concession for another five years. Does Melita Shipyard have another secret agreement with Transport Malta?  Why is Transport Malta so mysterious about the operations of this company?  Certainly, it seems that it has continued to renew the contract without allowing for public scrutiny as Melita Shipyard or its related parties are still operating from the same site as before.

As previously reported by this portal, Transport Malta, has given other similar concessions, without accountability or transparency. Apparently, if his replies to PQs are anything to go by, Minister Mizzi is not all that aware of what is actually going on in James Piscopo’s realm at Transport Malta…Either that, or the Minister is actually turning a blind eye, because Piscopo may well be in the circle of preferred decision makers by the Prime Minister and therefore can run Transport Malta and award concessions as he pleases.

Meanwhile, we all look forward to some long awaited answers to this perplexing saga.