Thursday, February 10, 2000

Holland America contracts for two more
84,000-ton cruise ships
Carnival C orporation's Holland America Line has signed agreements with Italian shipyard Fincantieri Cantieri Navali S.p.A. for the construction of two new 84,000-ton vessels. They are expected to enter service in 2003 and 2004.

The 1,800-passenger ships will cost approximately $400 million each and will be constructed at Fincantieri's Marghera shipyard. They are the third and fourth in a new series of vessels for Holland America, which also has options with Fincantieri for one more 84,000-ton sister ship.

The 951-foot-long ships will include a unique propulsion system that includes a diesel-electric power plant, backed up by a gas turbine as an additional power source. The vessels will be able to operate on either diesel or gas turbine power.

"There are advantages to both systems and we think this approach will allow us to take advantage of the best attributes that each of these technologies currently offer," Lanterman said.

Lanterman noted that the ships will also use the Azipod propulsion system, allowing for greater maneuverability and enhanced operating efficiencies.

Earlier this week Carnival Corporation announced that it was working with Wärtsilä NSD to develop a smokeless diesel-electric propulsion system for its future newbuilds.

With the two new Holland America ships, Carnival Corporation now has 13 vessels with an estimated value of $5.1 billion scheduled for delivery over the next four years.

In addition to the four 84,000-ton ships, Holland America has two other ships on order from Fincantieri, including the 63,000-ton Zaandam, scheduled to enter service in May, and the 61,000-ton Amsterdam, which is slated to debut this fall.

Carnival Corporation unit Carnival Cruise Lines also has six new ships on order, including three 102,000-ton "Destiny-class" ships and three 84,000-ton "Spirit-class" ships, scheduled to enter service between now and 2003. Also on order for Costa Cruises, another Carnival Corporation-affiliated line, is the 2,112-passenger Costa Atlantica, which is slated to debut in late spring 2000.

"Carnival's growth has been driven primarily by the expansion of our core brands through our aggressive newbuilding program," said Micky Arison, Carnival Corporation chairman and CEO. "These two new vessels bring our total to 13, which will allow us to further bolster our leadership position in the cruise industry."

Marine Transport Corporation buys
Mormac Marine Group ocean bullk businesses

Mormac Marine Group Inc.'s ocean bulk transportation businesses will join the Marine Transport Corporation group of companies which include Marine
Transport Lines, Intrepid Shipping and MTL Petrolink.

Mormac operates 10 U.S. flag vessels, including

  • two tankers involved in crude oil transportation for another owner,
  • three product carriers owned by Mormac employed on time charter and contracts of affreightment, and
  • five vessels for the Maritime Administration.

Operation of the two tankers trading in crude will be combined with Marine Transport Lines' ship management group. The three Mormac product carriers will be bareboat chartered by Marine Transport Lines and traded as a "pooled" fleet with MTC's three similar product tankers. Mormac's government operation will be maintained as a separate unit with its Baltimore office.

The total price paid by MTC for the Mormac businesses is based on their performance over a five year period. The minimum amount payable is approximately $7 million.

Marine Transport chairman and chief executive Richard du Moulin termed the deal another step in the much-needed consolidation of the Jones Act shipping trade in the U.S., where we see MTC as one of the leaders. Ourstrategy continues to be focused on acquiring profitable businesses with excellent customer relationships, contract portfolios and experienced, committed personnel who share our vision for shipping in the U.S."

Last week MTC announced it had completed a transaction whereby $25 million in cash was added to its balance sheet through the monetization of future charter earnings from an extended bareboat charter of its vessel Marine Columbia to BP Amoco. These funds are available to it for merger/acquisition activities, the chemical transportation joint venture with Stolt-Nielsen, and other initiatives.

EU team in Korea for talks on dumping in shipbuilding
The Korea Times reports that a delegation from the European Union is now in Korea for talks on alleged dumping by Korean shipbuilders. The Ministry of Commerce, Industry and Energy (MOCIE) said that bilateral discussions with the delegation started yesterday.

"We will seek to clarify the fact that Korean shipbuilders' strong performance on the European market is based on their respective price competitiveness and that there is absolutely no evidence of government subsidies,'' a ministry official is quoted as saying.

According to EU authorities, evaluations of nine contracts since last November have shown that Korean shipbuilders were dumping at margins of 15-40 percent and that the Korean government used portions of rescue funds from the International Monetary Fund to help shipbuilders. The state-run Korea Development Bank participated in the restructuring of Daewoo Heavy Industries and government funds were deployed in the process of Hyundai being contracted to manage the failed Halla Engineering and Heavy Industries.

The ministry insists, however, that KDB's participation in the normalization of Daewoo Heavy Industries "cannot be seen as a subsidy." Charges that IMF funds were used to help Korean shipbuilders do not hold ground "since the entire amount has been deposited with the Federal Reserve Bank in New York," reports the Korea Times.

"A part of the problem is the lack of understanding on the part of the EU and we will certainly utilize this opportunity to clarify whatever needs to be clarified,'' the MOCIE official is reported as saying.

Britain unveils plan to protect its coastline
The first stage in a new initiative to protect Britain's coastline was announced today by the U.K. Minister for Transport, Lord Macdonald.

He announced a consultative process that could lead to the setting up of Marine Environmental High Risk Areas (MEHRAs) to help protect sensitive marine and coastal environments at particular risk from pollution from shipping. In particular, the establishment of such areas could:

  • provide guidance to mariners;
  • inform maritime operational decisions; and
  • inform future Government policy in this area.

The establishment of MEHRAs was one of 103 recommendations contained
in the report of Lord Donaldson'sinquiry, Safer Ships, Cleaner Seas.Donaldson proposed that the Government should establish a small number of areas covering no more than 10% of the entire UK coastline. These would be 'comparatively limited areas of high sensitivity which are also at risk from shipping'.

Lord Macdonald said developing an objective methodology for the identification of MEHRA had been difficult given the range of environmental sensitivities involved and the need to develop reasonablecriteria.

Consultants Safetec UK Ltd were hired to prepare a methodology and selection criteria for the identification of areas that could be potential MEHRAs. "We have now published the consultants' report ," said the minister "and we are inviting interested parties for their views on whether the consultants' proposals are a reasonable and sensible basis for further work.

"We are also involving relevant members of the Department's Marine
Pollution Advisory Group in consideration of the consultants' report.
This is an open process. At this initial stage, it is important that
we get the methodology right - the Government is not yet committed to
any particular approach, or to the selection of specific sites as

The Minister added:

"We will then consider the comments received and prepare a
consultation document setting out the Government's proposed criteria
for the identification of MEHRAs. This will include proposals on how
and where MEHRAs might be established and how best to publicize them
to mariners."

"Following the second stage of the consultation exercise, I would
hope that we can agree to the establishment of MEHRAs as quickly as
possible, along with suitable arrangements to monitor the
effectiveness of the policy."


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