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New regulations to help yacht industry

Manufacturers eye competitive designs

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The new laws will position UAE superyacht manufacturers who haven't already upgraded to international standards at a new level to ensure domesticallymade personal yachts perform well abroad.
Gulf News

Dubai: New UAE regulations to help the domestic yacht-building industry compete at a global level will help large manufacturers seek out new designs for release on to the world market that are safe, environmentally-friendly and in demand.

The regulations will come into effect on July 1, industry sources said.

"The current codes and regulations for the larger yachts are based on conventional steel ship technology which imposes strong limitations on the innovative and future orientated yacht industry," the UAE National Transport Authority says in its new 168-page UAE Yacht Regulations for yachts more than 24 metres in length.

"Accordingly the present statutory regime for certification of commercial yachts is not considered to be an appropriate long- term solution for the non-commercial segment of the yacht industry which builds private yachts not intended for the leasing market," says the document, a copy of which has been obtained by Gulf News.


To prepare for the future, the authority "has identified a need for yacht regulations that address the larger size segment of the private yachts, that is yachts above 24 metres not intended for commercial use, without any restriction with respect to the number of persons onboard, nor to the maximum size of the yacht."

The new laws will position UAE superyacht manufacturers who haven't already upgraded to international standards at a new level to ensure domestically made personal yachts perform well abroad.

"The UAE National Transport Authority trusts that these regulations will be recognised by any flag and port state as adequate safety and environmental standard for yachts above 24 metres as these regulations provide equivalent safety to existing IMO (International Maritime Organisation) instruments, include all mandatory international regulations applicable to yachts and are developed based on functional requirements to accommodate the innovative and future oriented yacht industry," the authority said.

In an interview with Gulf News, Nasser Al Sha'ali, Chief Executive Officer of Gulf Craft, said his industry welcomes the new measures in an effort to make the UAE maritime manufacturing sector one of the best in the world.

Former CEO of the Dubai International Financial Centre, Al Sha'ali said Gulf Craft is the largest yacht manufacturer not only in the UAE but throughout the Middle East.

Ajman-based Gulf Craft employs 1,400 workers at three shipbuilding and service yards in the UAE and another combined yard in the Maldives.

Of about 30 models, 18 of Gulf Craft's yachts are longer than 30 metres (100 feet) and about two out of every three ships the firm makes are shipped annually to new customers around the globe.

"The new regulations are very positive news for us," Al Sha'ali said.

"We are already MCA compliant [Maritime Coast Guard Agency] so we're already compliant with these regulations but they will help the industry overall."

Al Sha'ali said the new regulations will "add to the safety of the maritime community and bring us up to par with other international societies that have these rules in place."

By raising the standards for construction of superyachts in the UAE, the country is helping the industry "carve out a niche" in the world market.

He said that new regulations should be phased in through a graduated process to allow other boatbuilders some time to adopt new measures to meet a marketplace that wants larger vessels.

Wealthier customers are demanding larger super-yachts to stand out from a growing list of bigger personal ships registered in high-end ports of call at resort cities all over the world.

The UAE National Transport Authority is aware of personal vessels getting larger.

"Larger yachts are increasingly being custom-built based on individual designs. The segment of yachts larger than 40 metres is predominantly individually built to the owner's design and specification. The 100 largest yachts in the world today are from 65 metres to 165 metres, with known projects exceeding 200 metres in length," the authority said.

"These yachts exceed the maximum 3,000 GT size in presently available regulations for commercial yachts and also carry more than 12 persons/guests in addition to the crew, which is the limit for formal certification as a cargo ship with equivalencies in accordance with SOLAS [International Convention for the Safety of Life at Sea.]"

To meet the demand, Gulf Craft is working on even larger ships with some concept designs sure to meet the tallest orders.

"We do have interest from clients in the region and Europe for yachts up to 150 feet," said Al Sha'ali.

One of the more popular designs for Gulf Craft is its Majesty 121, a long-range personal yacht that was unveiled at Dubai Festival City's creekside harbour at a gala reception.

Despite an abysmal year in 2009 thanks to the world economic downturn, Gulf Craft still managed to post a profit but was forced to lay off several hundred workers until the economy improved.

"We're doing OK. Last year we took a hit. We kept our heads above water and we made a modest profit. We're looking at hiring some workers again. Things are picking up again in the last four months," he said.

With new regulations coming forward, Al Sha'ali said he is encouraging authorities to come up with other new ways to help support a growing maritime industry in the UAE.

Two big hurdles for the UAE superyacht industry — private yachts can't be chartered and rarely are yachts mortgaged - continue to hold back the maritime industry, he said.

Under existing UAE maritime law, personal yacht owners are not allowed to charter their vessels to other paying customers who want to rent large yachts for short periods of time because the vessels are not licensed for commercial use.

"It's a great way to offset costs but individuals are not allowed to charter out their yachts," he said.

And the current econ-omic climate does not encourage UAE banks to come up with flexible personal yacht mortgages, he said. "What lenders are very nervous about is that boats are very mobile, they fear they could never see the boat again," said Al Shaa'li.

Banks that recognise the tremendous potential of the superyacht market and are willing to open up lending "would make it much more accessible for would-be boaters."