Sea Views: Kuwait, Iran discuss war underwriting

Fairplay has rep-orted that Iran and Kuwait are discussing a possible joining of forces in negotiating with war risk underwriters in case of conflict in neighbouring Iraq.

"We are in the process of negotiating with Kuwait to have a joint system of underwriting vessels, so that our trade is not affected," an Iranian official told Fairplay. "In case there is war, we will strike a deal with (unidentified) Swedish hull and machinery underwriters," the official added.

The move aims to avoid a withdrawal of cover for vessels calling at the key northern ports of Bandar Imam Khomeini and Shuwaikh, both located precariously close to Iraq. The two sides are concerned about protecting non-oil trade, specifically bulk imports and petrochemicals exports out of Bandar Imam, and box traffic into Shuwaikh.

Yemeni surcharges implemented by FEFC: Member lines of the Far Eastern Freight Conference (FEFC) have implemented a war risk surcharge of $250 per TEU for all cargo discharged in Yemeni ports.

The carriers said this is in order to cover the increasing costs of war risk insurance.

Furthermore, member lines have been notified by their insurers that the possibility exists that Indonesia may incur increased insurance premiums in the near future, and shippers are advised that it may be necessary for member lines to institute a war risk surcharge should this take place.

FEFC members say they will continue to monitor the situation and keep the trade advised of developments.

Member lines include those from several agreements including AWRA (Asia Westbound Rate Agreement), EMA (East-bound Management Agreement) and MRA (Mediterranean Rate Agreement).

Meanwhile, the Singapore container terminal operator PSA Corp, which operates the Aden Container Terminal (ACT) has announced that it is co-operating both with government agencies and with shipping lines to counter high insurance premiums following the Limburg explosion last month.

The situation has already prompted one major container operator to temporarily move from Yemen. APL, the container arm of Neptune Orient Lines, has temporarily moved its relay hub from Aden to Salalah.

ASRY reports record business: Bahrain-based Arab Shipbuild-ing and Repair Yard (ASRY) has reported record business of $76.5 million in the first ten months of this year.

The company attributes the growth of business to increasing VLCC work and it reported an 11.6 per cent rise in operating income, accounted for by 91 vessels repaired or booked for repair up to October this year, compared with 84 for the same period last year. Most of these being VLCCs.

The results were announced at a meeting of the ASRY Board in Manama, last week, which then approved the company budget for 2003. The amount was undisclosed but was based on a target of 125 vessels. The board meeting was headed by company chairman Eid Abdulla Yousif and attended by representatives of shareholder governments Bahrain, Iraq, Libya, Kuwait, Saudi Arabia and UAE.

ASRY's facilities include a 500,000-DWT graving dock and two floating docks for vessels up to 120,000 DWT.

Manila terminal ponders old ship penalty: The Port of Man-ila's state-owned International South Harbour Terminal is considering a plan that will penalise older, less efficient cargo vessels by charging a higher cargo handling rate.

The operator of the terminal, Asian Terminals Inc (ATI), confirmed that it had requested permission from the Philippine Ports Authority to be allowed to charge higher rates for handling older cargo vessels.

The ATI spokesperson went on to say that due to higher costs to service older vessels the company felt justified in seeking this increase and she explained that this was mainly due to additional time and manpower involved with older ships. Furthermore, the safety risks in handling older vessels were also greater.

Since current tariffs at the Port of Manila do not distinguish between old and new vessels, ATI has therefore asked the Authority, which administers the South Harbour terminal, to approve a rate setting that would allow them to recoup extra expenses in the handling of older ships.

The South Harbour terminal handles the bulk of international general cargo passing through the Port of Manila and the terminal also handles about 40 per cent of the international container cargo passing through the port.

Seabulk reports third-quarter loss: Seabulk International, Inc reported a net loss, excluding charges related to its recent refinancing, of $2.8 million or $0.21 per diluted share for the quarter ended September 30, 2002.

Including charges of $27.8 million or $2.16 per diluted share related to the early regularisation of debt in connection with the company's refinancing, the net loss for the current period was $30.6 million or $2.37 per diluted share compared to net income of $2.9 million or $0.27 per diluted share in the year- earlier period.

Revenues were $80.4 million in the current quarter compared to $89.7 million a year ago, due primarily to reduced demand and lower day rates for the company's offshore vessels in the important Gulf of Mexico market. Operating income was $10.0 million compared to $18.6 million earned in the third quarter of 2001.

"Despite continued cost-cutting and a stellar performance from our domestic tanker unit, we were unable to overcome the negative effect of the depressed Gulf of Mexico offshore vessel market," commented chairman, president and chief executive Gerhard E. Kurz.

"Our international offshore operations, on the other hand - including West Africa, the Middle East and Southeast Asia - performed well, and it is only a matter of time before the domestic market rebounds as renewed demand for energy catches up to declining supplies.

Our key financial accomplishment during the quarter was the revamping of our balance sheet through the issuance of 12.5 million new shares of common stock at $8 per share, the refinancing of our credit facility, and the redemption of our most expensive debt - the 12.5 per cent Senior Secured Notes.

Going forward, we expect these actions to result in annual interest savings of more than $10 million. We further anticipate having the financial flexibility to invest in selected new equipment and take advantage of future growth opportunities."