August 17, 2007
Fairmount HT slams progress of conversion project
Philip Adkins, CEO of Fairmount Heavy Transport N.V. (Oslo: Fair) has some harsh things to say about the progress of a Malta Shipyards conversion project.
Fairmount Heavy Transport NV was incorporated in July 2005 and in August 2005, took delivery of two of the world's largest semi-submersible barges BOA 19 and BOA 20 from BOA Offshore AS . Renamed FJORD and FJELL, both barges are due to be converted to self-propelled heavy transport vessels to transport "high value/high spec" floating and non-floating cargoes over long ocean distances.
In June this year, Fairmount Heavy Transport finalized a contract Ensco for the transport of the Ensco 100 jack up rig. Under the contract, the FJORD was to pick up the Ensco 100 jack up rig in Malabo and deliver it to Rotterdam. The voyage was to start in August and was expected to take approximately 40 days, including mobilization from to Malabo.
Today, however, Fairmount Heavy Transport (FHT) announced that it had been informed by the Malta Shipyards that the final sailaway date of the FJORD would be in October 2007.
"Over the last nine months, this project has consistently been let down by almost all of our sub-contractors," declared Adkins. "They have failed to meet their own commitments to us to supply materials and qualified personnel. In many cases the materials were not identified in any critical path planning, but the consequential delays were severe. In due course, it may well be necessary to hold these parties to account."
Adkins said that "the series of creeping delays that have plagued this conversion over the last 18 months have undermined the confidence of our shareholders."
"The previous delivery deadlines we have announced to the market have not been achieved and it is entirely proper for our shareholders to be outraged," he said. "I imagine my own credibility with the market to be marginal at best. I accept my responsibilities as the CEO of this company and am prepared to be held publicly accountable for our performance."
"Nevertheless," he continued, "in spite of these enormous challenges, I believe that the FHT site team has saved this project. The ship is nearly complete. The performance of the vessel will exceed the market's expectations and we are certain we will have many attractive cargoes awarded to us by a growing list of clients who value our company as a credible, competitive alternative to the other heavy transport players. It has been a long, hot and stressful summer in Malta. Our team is determined to succeed. We do not anticipate this further delay to have a material impact on the total conversion cost. We continue to enjoy a strong balance sheet and the support of our banker, HSH Nordbank."
Adkins said the company has been in close contact with Ensco with respect the Ensco 100 transport contract. "It is our understanding that the current climate for rig operators in West Africa is difficult and dangerous. Ensco has informed us of their need to depart from Nigeria immediately. Given the urgency, we have proposed to Ensco an alternative wet tow solution, expediting their exit from Nigerian waters. This may have implications on our current contract with Ensco and we will inform the market as the situation becomes clear."
Earlier, on August 10, Fairmount Heavy Transport N.V. (FHT) announced it had informed Fairmount Marine BV (FM) of its decision to terminate the management agreement between FHT and FM.