NEWS | Wednesday, 22 August 2007

Shipyards conversion contract stopped after GWU boycott

Ship christened despite the fact that it was not completed

Charlot Zahra

A second contract for the conversion of a semi-submergible barge into a self-propelled heavy transport vessel by Malta Shipyards (MSL) has been put on hold after the General Workers’ Union (GWU) boycotted the christening ceremony for the first vessel of the same owner on Sunday.
An irate Philip Adkins, CEO, Fairmount Heavy Transport NV, the Rotterdam-based owner of the “Fjord” and the “Fjell”, told BusinessToday: “As of Sunday we have stopped all the work on the ‘Fjell’ (the second vessel) and we are in serious discussions with another European shipyard” to take the second vessel there instead of Malta.
Atkins said of the GWU boycott of the christening ceremony of the first vessel, the “Fjord”: “We are shocked and deeply offended. We have informed the government that we will be considering taking our second vessel to another shipyard. In my experience I have never encountered such hostility to a client anywhere in the world. It’s shocking and amazing to me.
“It is very important to point out that the second contract that we have signed with Malta Shipyards are in the range of almost 50 million Euros and we will be contacting the appropriate government minister in order to receive and explanation why foreign companies investing 50 million Euros in the Maltese economy are treated with such hostility and contempt,” he insisted. Adkins explained that “on Sunday we were shocked and disappointed that the union was so hostile and disrespectful to our company and to our other honoured guests. It’s very important for us to point out that we very much appreciated the good work of some working men and women at Malta Shipyards and it’s so shocking to me that the Union would decide to embarrass such hard-working decent people who reflect the hard-working qualities of the Maltese people.
“We love Malta, we appreciated very deeply the warm hospitality we have received here but the Union has said we are not welcome and we should take our business to another country,” he insisted.
Asked by BusinessToday what would make him reverse his decision about the second contract, Adkins said curtly: “We need an explanation from the Minister on how you do business here”.
On its part, the Ministry for Investments, Industry and Information Technology (MIIT) said in a reaction yesterday that the GWU’s attitude in this case was “undesirable and we are concerned about the consequences it may have”.
“A boycott to a simple event organised by this important client sends the wrong message and is harmful to the reputation of the Shipyard. Other shipyards in Europe and the Middle East will be keen to take the second project if the client decides to cancel the contract,” a spokesperson for the Ministry told BusinessToday.
He explained how the restructuring plan always envisaged that the Shipyard shifts from traditional ship repair, where it is losing competitiveness to lower cost countries, to these large projects, that are longer-term and that result in a better selling rate. “The Fairmount Fjord, like other projects in the Offshore Conversions sector, is an important milestone in this sense,” the spokesperson said.
He warned that “the GWU is putting the livelihood of its members in jeopardy by these actions. We are informed that the Metal & Construction Section is re-introducing traditional militancy, opposing management, intervening in commercial matters and in general trying to take the clock back to the times when the Union used to run the place.
“This cannot be tolerated. The GWU needs to understand that commercial and management decisions are the responsibility of management and the Union should stay out of them. The Union’s concern should be to encourage more productivity amongst its members so that projects are completed on time and the Shipyard will have a better chance to survive. “One hopes the Union remains faithful to its members and their families, whose livelihood depends on these projects, and not faithful to some objective outside the Shipyard,” the Ministry’s spokesperson insisted.
Asked whether the Ministry will be intervening with the owners of the “Fjord” to convince them to reverse their decision, the spokesperson said: “The negotiations between the Shipyard and its clients are being ably handled by management. The client’s decision is always a commercial, not a political, one. Having said that, we will provide our commitment and support to the board and management if the need arises.”
Although expected to be a low-key event, aimed at the international maritime industry, the client wished to keep the tradition of inviting the employees to attend the blessing which was done by Archbishop Pawlu Cremona.
According to an advert in the GWU daily newspaper “l-orizzont”, the boycott for the christening ceremony of the “Fjord” was ordered by the GWU’s Metal and Construction Section “for various reasons that affect the interests of workers at the shipyards”.
However sources close to the negotiations told BusinessToday that the reason given by the GWU in a memo sent to workers was that the Union had not been informed about the ceremony as it was on other cases.
They added that Sammy Mejlaq, the recently-elected Section President and former Drydocks Chairman, informed MSL management that the Union would be boycotting the event and the employees would not be attending.
Mejlaq told management that he expected to be consulted and involved in the preparations. He also said that there were differences with management “on certain issues”.
Asked why the GWU had boycotted the christening of the “Fjord” on Sunday and what were the issues at stake, Section Secretary Pawlu Bugeja told BusinessToday: “We have no intention to make the story a public issue until there is any reaction by the management of MSL or any other sector. It is an internal issue between the union and the management.
“The only detail I can give you is that the General Workers Union that represents the whole workforce at the shipyards was totally ignored for the ceremony,” he insisted.
However Bugeja would not comment whether he believed that the Union’s behaviour would scare off potential clients of the MSL, putting in jeopardy the survival of the company.
To add insult to injury, the conversion works on the “Fjord” were not completed on time, but the christening ceremony took place nonetheless. Asked by BusinessToday to confirm this, Adkins said he would not comment on the matter.
The MIIT spokesperson confirmed that the project was not completed on time.
“However, one has to say that during the project the client requested a series of changes which has impacted the completion date. Changes in project scope are not rare in these projects, but they do lead to delays. We are informed that the project is now nearing completion,” he told BusinessToday.
Fairmount Heavy Transport NV (FAIR) was incorporated in July 2005 and subsequently financed with approximately USD 50 million in equity through a private placement in July 2005.
In August 2005, FAIR took delivery of the semi-submersible barges BOA 19 and BOA 20 from BOA Offshore AS in Trondheim. The barges were renamed “Fjord” and “Fjell” respectively.
The “Fjord” and “Fjell” are amongst the world’s largest semi-submersible barges. Both barges are being converted to self-propelled heavy transport vessels able to transport “high value/high spec” floating and non-floating cargoes over long ocean distances, worldwide.
The vessels will enter into service in the offshore heavy transport segment in 2007. Fairmount Heavy Transport N.V. is a Rotterdam based company currently quoted on the Oslo Stock Exchange.