Kongsberg wins major power-by-the-hour service contract

Havila Kystruten ships will begin operations on Norwegian coastal routes in January 2021

When Norway’s Kongsberg Group acquired the Rolls-Royce Commercial Marine (RRCM) business, it took on board an operation that in 2018 reported an underlying loss of about $45 million. It is understood that that part of Kongsberg’s internal strategy for returning the former RRCM activities to profitability is to maximize opportunities in the service and maintenance area.

A substantial new service agreement with Havila Kystruten AS marks a promising first step in that direction.

The NOK 150 million (about $18 million) ten-year long “power-by-the-hour” service agreement with Kongsberg covers four new LNG-fueled coastal cruise vessels.

The ships are of Havyard 923 design. Two of are on order at Spanish shipbuilder Astillero Hijos de J. Barreras and two at Turkey’s Tersan shipyard. They will be equipped with a large equipment package from Kongsberg Maritime that, when the ships were ordered in 2018, originally carried the Rolls-Royce label, including Azipull main propulsion thrusters with permanent magnet (PM) drive motor, PM tunnel thrusters, and stabilizers. Kongsberg is also delivering the ship’s LNG systems, which include four Rolls-Royce Bergen gas engines (although Rolls-Royce retains ownership of Bergen Engines, Kongsberg continues to have access to its products through a trading arrangement).

Kongsberg launched power-by-the-hour in 2017, and signed up its first customer for the service, NorLines, the same year.

Under the power-by-the hour agreement, the vessel owner hands the responsibility for service planning and performance back to the equipment supplier, Kongsberg Maritime.

The customer pays a fixed charge per hour of operation, per ship. Kongsberg Maritime monitors the equipment aboard each vessel from on shore, collecting data from onboard sensors. Kongsberg’s engineers will be able to connect to the ship and carry out service activities remotely or, if necessary, send out a service engineer to do the job.

The agreement also covers planned maintenance, while day-to-day maintenance aboard ship will be carried out by the shipping company itself.

“It’s extremely important for Havila Kystruten to operate our new fleet with as little downtime as possible due to service requirements or equipment failure. Power-by-the-hour is a tool made possible in the age of digitalization, and we are looking forward to experience its benefits for our customers,” says Per Sævik, Chairman of Havila Kystruten.

“Power-by-the-hour harnesses the power of ‘big data.” The system enables us to offer ships better and more comprehensive service agreements than before,” says Egil Haugsdal, President, Kongsberg Maritime.