It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Sunday, December 19, 2021
ABS Approves 3D-Printed Parts After Six Month Trial on U.S. Tanker
Polar Endeavour tested three 3D printed parts in six months of service (ConocoPhillips)
A series of 3D-printed mechanical parts used aboard an in-service oil tanker have been validated in good working condition at the end of a six-month trial. According to ABS, which participated in the project along with ConocoPhillips Polar Tankers, Sembcorp Marine Ltd, and 3D Metalforge, the project marks a milestone for the technology that could revolutionize how parts are made and supplied to ships in need of repairs.
The test project began in February 2021 with the fabrication and lab-testing of mechanical parts for use aboard the U.S.-flagged crude oil tanker Polar Endeavor. Built in 2001, the 141,740 dwt tanker was outfitted with a gear set and gear shaft for boiler fuel supply pump, flexible coupling used on a marine sanitation devices pump, and an ejector nozzle for a fresh water generator, all produced using additive manufacturing (AM) commonly known as 3D-printing.
After six months in operation, all the parts were retrieved and inspected by the vessel’s crew, followed by a remote survey by ABS that confirmed their good condition. ABS has now approved these spare parts after successful onboard testing on the tanker.
“We are delighted with the performance of the parts and the successful completion of the project,” said Patrick Ryan, Senior Vice President, Global Engineering and Technology for ABS. “It’s an important step forward for a technology that certainly has a significant role to play in the future of the marine industry. ABS is committed to ensuring these types of parts are introduced without compromising safety.”
According to ABS, the success of the trial and subsequent approval means 3D-printing can be used for products and components. The technology can permit parts to be fabricated locally or potentially on board ships and offshore assets. The result could be shrinking the supply chain and lead times for specialized and complex parts, introducing new efficiencies driven by design innovation, reduced manufacturing time, and improvements in parts availability.
“The superior performance of these parts in service is a testament to the rigorous engineering, manufacturing, and post-production testing put in place by the team involved with this venture,” said Robert Noyer, Engineering Superintendent for ConocoPhillips Polar Tankers which supplied the ship for the test. "We look forward to future opportunities to support our vessels with this technology.”
Traditional parts used in shipbuilding and repair are manufactured with casting or forging techniques. For this project, the consortium utilized AM to fabricate three types of parts that meet or may even exceed conventionally manufactured products in terms of quality. 3D-printing fabricated the parts by adding material layer by layer.
The industry has been experimenting with applications for the technology over the past few years. In February 2021, the largest metal propeller produced by 3D-printing was certified by BV while other applications have included manufacturing equipment to be tested in port operations.
The stalled energy transition
December 16, 2021
CMA CGM
Showered with cash like never before, what is it that containership owners know that the rest of us have yet to work out?
Newbuild prices are considerably elevated and most of the shipowning community cannot, hand on heart, say with any conviction that they know what the fuel of the future is. And yet our boxship friends have piled in with more orders for new ships than ever before. Granted many of these new ships are alternatively fuelled – for which read LNG bar a handful of Maersk methanol dual-fuellers – but really we are still so far away from being able to order tomorrow’s ships with any confidence. Where will the green methanol come from? Where will all the green hydrogen come from? Fortunately, the dry cargo owners are sensible and are holding back so we can see a healthy demand-supply relationship in the dry cargo area for a few years ahead.
What is it that containership owners know that the rest of us have yet to work out?
Shipping is obliged to become green but cannot do it on its own. The world seems to not be joining the dots – demanding zero emissions without establishing the requisite infrastructure.
Of course, the regulatory tardiness does not help. I am very worried about EEXI and CII rules coming in. This bodged legislation will not necessarily put us on the green path we need to be on fast. It will, however, make older ships go so slow, potentially great news for owners as rates will rally.
It’s not just shipping that has struggled to keep a resolute green path in 2021. The global energy transition has stalled this year – witness the extraordinary growth in coal use this year, in no small part due to high gas prices.
One final point relating to finance. You might have read recently about the big drop in syndicated marine loans this year. While this is a clear trend, don’t think for a moment that this translates into the finance taps being turned off for shipowners. There is still a massive inflow of capital from every other source. Whatever project you look at these days, four or five bids come from non-banking sources. Shipping is attractive again and there will not be a lack of funding anytime soon.
This article first appeared in the latest issue of Maritime CEO magazine, published this week. Splash readers can read the full magazine for free by clicking here.
Successful CO2 Capture Tests Using Scrubber Fitted on Cargo Ship
Langh Tech tested carbon capture using the scrbbers fitted on a Langh cargo ship (Langh Shipping)
Finland’s Langh Tech has become the latest company to report successful early trials of carbon capture and storage on a vessel in normal operations. Seen as a potential technology to address the shipping industry’s need for systems to help existing ships meet the goals for decarbonization, explorations are just beginning on the requirements to make CCS possible at sea.
“Langh Tech conducted several preliminary tests of capturing CO2 emitted by a vessel’s main engine by the means of using an existing closed-loop SOx scrubber system,” the company said in detailing the project. “Langh Tech is also researching methods of extracting the captured CO2 from the process water and looking for ways to store and/or utilize the captured CO2 efficiently both onboard vessels and upon possible discharge to shore.”
The company which designs and manufactures exhaust scrubbers reports the tests were carried about aboard one of its sister companies, Langh Shipping’s vessels utilizing the existing Langh Tech hybrid scrubber installed on board. Langh Tech’s closed-loop scrubbers were installed in 2013 and 2014 on Langh Ship’s five cargo vessels which sail on the Baltic Sea and the North Sea, stopping at major northern European ports.
In the tests, additional alkali was added to the scrubber closed-loop process water to provoke a reaction between the alkali and CO2, effectively capturing the CO2 from the exhaust gas into the process water. Langh says the setup of tests was limited by the capacity of the existing alkali pump, but positive results were observed even with only a slight increase in the alkali dosing. At a main engine load of approximately 85 percent, a 5 percent increase in alkali dosing (over normal level) was able to reduce the measured CO2 emission by 3.3 percent. At 40 percent main engine load, a CO2 emission reduction of nearly 7 percent was observed.
During the tests, the alkali consumption remained at “a reasonable level, and the effect of this on the operating expenses of the vessel would remain feasible,” reports Langh. “Results of the tests are regarded as a tentative proof of concept and additional tests with further increased alkali feed shall be conducted to verify this.”
The company believes that the CO2 capture feature could be applied to any Langh Tech closed-loop or hybrid scrubber systems with relatively low cost impact, and requires only minor changes to the existing scrubber system. The process could be performed with readily available alkali products such as NaOH and MgOH2, which are both already being used in many SOx scrubber processes.
CRIMINAL CAPITALI$M
Icelandic prosecutors raid Eimskip offices in ship scrapping probe
December 20, 2021
(TOMMOROWS NEWS TODAY)
Eimskip
The Icelandic district prosecutor has been granted permission to raid the offices of shipping company Eimskip in order to conduct an inquiry into possible legal irregularities involving the sale of two scrapped ships to India.
The prosecutor has requested specific documents relating to the sale of the 1,465 teu pair Goðafoss and Laxfoss in 2019, which the Environment Agency of Iceland reported to the district prosecutor in 2020. Eimskip said through Nasdaq Iceland that no individuals have legal status in the matter.
The case revolves around the scrapping of the 1995-built ships, which were sold to cash buyer GMS and then offloaded to the Malwi Ship Breaking and Gohilwad Ship Breaking yards on India’s west coast.
The investigation relates to whether the country’s Act. No. 55/2003 on the treatment of waste and subsequent regulations have been infringed. Since 2018, European legislation has outright banned the demolition of ships over 500 gross tons anywhere except for licensed recycling sites, and similar restrictions have been in effect in Iceland since a mere year ago.
“It is impossible for the company to estimate possible financial effects as the Act contains sanctions provisions without stating any specific amounts. The only amount referenced in the Act relates to the Icelandic Environmental Agency’s authority to apply administrative fines towards legal entities amounting up to ISK 25m ($192,435).”
Eimskip said earlier that it believes that it complied with laws and regulations in the sales process. “Eimskip takes the matter seriously as the company, its management, and employees place great emphasis on social responsibility in their work and have long paid attention to environmental issues in their operations.”
Adis Ajdin is an experienced news reporter with a backgroud in finance, media and education. He has written across the spectrum of offshore energy and ocean industries for many years and is a member of International Federation of Journalists. Previously he had written for Navingo media group titles including Offshore Energy, Subsea World News and Marine Energy.
Insurers Adopt Poseidon Principles for Decarbonization Transparency
In an effort to keep the focus on the shipping industry’s progress towards decarbonization, six of the leading insurance companies for the maritime industry are launching an initiative designed to encourage the industry and provide a further level of transparency on carbon initiatives. Called the Poseidon Principles for Marine Insurance, it represents the second expansion of the Poseidon Principles launched in 2019 that enlisted maritime financing and financial institutions in addressing global environmental issues.
Launched in Europe today under the auspices of the Global Maritime Forum, an international not-for-profit organization committed to promoting sustainability in global seaborne trade, the committee that developed the new charter says that the Poseidon Principles for Marine Insurance are a framework to quantitatively assess and disclose the climate alignment of marine insurers’ underwriting portfolios. In addition to the leading insurers and related organizations, members from the shipping community, including A.P. Moller-Maersk and Star Bulk as well as Lloyd’s Register, participated in the effort.
“We are pleased to see leading marine insurers join forces with signatories to the Poseidon Principles and the Sea Cargo Charter in establishing a framework to quantitively assess and disclose the climate alignment of their underwriting portfolios, and raising the bar for everyone by doing so relative to the goal of full decarbonization of international shipping,” said Johannah Christensen, CEO at Global Maritime Forum in support of the new initiative. “Alongside other stakeholders in the maritime value chain, the insurance industry has the influence and responsibility to drive progress.”
After the financial industry launched the Poseidon Principles, charterers followed suit with their initiative inspired by the same guidelines. Announced in October 2020, seventeen of the leading charterers committed to transparency showing the alignment of their efforts with the shipping industry’s decarbonization. The Sea Cargo Charter set a benchmark for responsible shipping and transparent climate reporting is seen as a tool to use charters to drive the shipping industry’s decarbonization progress.
Signatories to the new Poseidon Principles for Marine Insurance, which include as founders Swiss Re, Gard, Hellenic Hull Management, SCOR, Victor International, and Norwegian Hull Club, commit to assessing and disclosing the climate alignment of their hull and machinery portfolios. Under the new principles, they will benchmark their portfolios against two trajectories. One is linked to a 50 percent reduction of annual CO2 emissions by 2050 compared to 2008 and the other is linked to a 100 percent reduction of emissions by 2050.
“As risk managers, insurers and investors, the insurance industry has a key role in supporting the transition to a net-zero economy. The Poseidon Principles will serve our institutions as well as our clients to quantitatively assess and disclose the climate alignment of their underwriting portfolios and thus improve decision-making at a strategic level and shape a sustainable future for all. The disclosure framework provided by the Poseidon Principles will enable us to credibly report our progress towards net-zero insurance using granular marine data,” said Patrizia Kern, Marine Head at Swiss Re Corporate Solutions and Chair of the drafting committee for the Poseidon Principles for Marine Insurance.
The Poseidon Principles for Marine Insurance is also the first sector-specific methodology to emerge in support of the UN lead Net-Zero Insurance Alliance (NZIA) which was launched in the summer of 2021. Eight of the world’s leading insurers and reinsurers established the alliance where members commit to transitioning their underwriting portfolios to net-zero GHG emissions by 2050.
The group plans to continue to expand the framework to further support a zero-emissions future for the shipping industry. They said they planned to add a third trajectory to the principles to align the full decarbonization trajectory with zero-lifecycle GHG emissions to meet the ambition of net-zero commitments such as the NZIA. In addition to the six founding members, brokers and other key stakeholders in marine insurance are committing to supporting the principles as affiliate members and aligning with the goal of decarbonizing international shipping by 2050. Affiliate members supporting the principles are Willis Towers Watson, Cefor, and EF Marine, and additional marine insurers are expected to join in the future.
#PIRACY; PRIMITIVE ACCUMULATION OF CAPITAL
Crew Reported Kidnapped in New Incident in Gulf of Guinea
After a seeming lull in attacks of merchant ships in the Gulf of Guinea with the increased international presence in the region, a new attack with a kidnapping was reported today in the same vicinity of other attacks in the region off Equatorial Guinea. Alerts have gone out for the potential of further piracy activity in the region.
While the details remain scarce at this moment, security consultants Dryad International is reporting that it believed six crew members have been abducted in an incident in the same place where another vessel was involved in another kidnapping incident in late October. The monitoring operation MDAT-GoG first reported a suspicious approach after midnight saying that a skiff was spotted with 12 individuals aboard. This was happening in the anchorage area near the port of Owendo in Gabon. This prompted MDAT-GoG to issue a warning for “an increased high risk of piracy activity for the next 24 to 48 hours.”
Dryad reported that six crew members were abducted although some set the number as high as nine crew from a containership in the same area that the OSV Montet Tide was the target of an assault on October 25. The offshore supply vessel managed by Tidewater was boarded and three crew members were reported taken in the previous incident that took place hours before pirates attempted an incident with an MSC containership. The Russian Navy took credit for chasing away the boarders on the MSC Lucia before they could abduct any crew members and then together the vessel were seen proceeding to the site of the Monet Tide.
Today's incident happened about 35 nautical miles away from the October reports, MDAT-GoG reported that the vessel had been boarded but was secured. They also said that Gabon has dispatched forces to the area. In later reporting, the Danish frigate operating in the area said that it had sent its helicopter to the area and spotted the skiff but was unable to stop it after it entered territorial waters apparently heading toward the Niger Delta region. The Danes boarded the containership providing assistance including searching for unaccounted for crew members leading to the current confusion on the exact number kidnapped. The Danish frigate is also providing medical care for one crew member from the containership that was wounded in the confrontation with the pirates.
Dryad tallies 2021 assaults on vessels at 10 with a total of 76 individuals believed to have been kidnapped. Most of those, however, were early in 2021 before the increased efforts in recent months by the international forces.
After the incident in which a Danish frigate intercepted a skiff and returned fire killing four suspected pirates, Dryad had cautioned that it was unlikely to immediately affect the pirate attacks. The European Community Shipowners’ Association had cautioned that the threat remained high and called for additional international efforts to protect merchant ships.
Note: An earlier version of the report indicated that the OSV had been the target of the attack, but today's incident appears to have only involved the crew members from the containership with three additional people being from the prior attack on the OSV.
Danish Prosecutors Seek to Bring Gulf of Guinea Pirates Home for Trial
Esbern Snare in the Gulf of Guinea (Anders Fridberg / Danish Armed Forces)
Danish prosecutors are looking for options to bring four captured pirates from the Gulf of Guinea to Denmark to face justice, and they are even examining the possibility of chartering a vessel to ship them all the way north.
On November 24, the Danish frigate Esbern Snare was on an antipiracy patrol in the Gulf of Guinea when her crew spotted a suspicious skiff in international waters. The crew launched a helicopter to investigate. The helicopter crew spotted equipment associated with piracy in the boat, including ladders, so the Snare gave pursuit and launched a boat with a boarding party. The suspected pirate skiff did not stop when ordered, so the Danish forces fired customary warning shots. In response, the skiff's occupants opened fire on the helicopter and the boarding party, putting seven holes in the Esbern Snare's launch.
The Danish forces returned fire, killing four of the skiff's occupants. One more individual went over the side and is unaccounted for, and four suspects were captured, including one with severe injuries to his leg. (The limb was later amputated by Snare's medical team.)
A Danish court has granted prosecutors' request to hold the survivors in custody in absentia. With an extension, Danish officials have until December 22 to bring the suspects before the court for trial. That would be a simple matter if the arrest had occurred in the Baltic, but the case is complicated by the Esbern Snare's location. Nearby West African states do not have legal arrangements in place for extradition by plane, nor could they provide certainty of local criminal prosecution under their own laws.
"[Bringing them] home is a big logistical and diplomatic task. It has also been investigated whether you can charter a ship and sail them home, but there are logistical and administrative challenges with that," said special prosecutor Karen Moestrup Jensen, according to Danish outlet DR.
If the suspected pirates are tried in a Danish court, their appointed attorney plans to argue that they shot at Danish forces in self defense - only after the Esbern Snare's helicopter crew fired the first warning shots.
Danish Anti-Piracy Action Jolts Gulf of Guinea Maritime Leaders
The Danish frigate Esbern Snare in the Gulf of Guinea (Anders Fridberg / Danish Armed Forces)
An intense debate has erupted following the recent deployment of a Danish frigate on an anti-piracy patrol in Gulf of Guinea, which resulted in the death of four pirates and the capture of another four.
West African defense analysts view the incident as a defining moment in the evolving maritime security situation in the Gulf of Guinea. This is the first time a foreign navy has resorted to lethal force in dealing with pirates in the region.
The operation happened 25 to 30 nautical miles south of Nigeria’s territorial boundary. Several international shipping associations have lauded the Danes’ response to a potential piracy activity; however, the action received a mixed reaction within some West African nations.
The Nigerian Maritime Law Association (NMLA) was the first to raise concerns over the incidence. According to a Nigerian newspaper Punch, NMLA’s leadership called for an independent inquiry that would look into the precise location of the incident in order to preserve Nigeria’s sovereignty.
“The Association supports all efforts to rid the Gulf of Guinea of piracy, maritime offences and all forms of criminality. It is concerned, however, about the sanctity of Nigeria’s sovereignty, application of the rule of law and respect of protocols of engagement with regard to the instant incident, and the emerging security regime in the Gulf of Guinea,” read the statement by NMLA.
Dr. Ifesinachi Okafar-Yarwood, a leading maritime security expert in the Gulf of Guinea, questions whether the Danish intervention may influence the nature of piracy attacks in future. “Could this see the increase in violence, as was the case in Somalia, which will justify a push for a Somalia styled response?” asks Dr. Okafor.
Amidst the debate over the role of international navies in anti-piracy operations, the region’s local governments must agree to face some realities, which may impede their efforts to stabilize the region.
Days before the Danish incidence happened, Amb. Florentina Ukonga, the Executive Secretary of the Angola-based Gulf of Guinea Commission (GGC), lamented that her organization consistently experienced lack of political commitment from leaders of the member countries. Amb. Ukonga was addressing participants in a virtual seminar held late last month as a prelude to Lagos International Maritime Week 2021.
Among other challenges, she noted the conflicting laws on security and safety at sea in the GGC countries.
“For instance, some countries do not have piracy laws; when pirates are caught, they are brought to the shores and let-off. But we do not want that to happen again. Nigeria has gotten an Act, the Suppression of Piracy Act of 2019, and we are proposing a code of conduct which should bind criminals when caught,” said Amb. Ukonga.
Dr. Dakuku Peterside, the immediate former Director of Nigerian Maritime Administration and Safety Agency (NIMASA), is another Gulf of Guinea maritime expert who has been pressing for a local solution to the region’s insecurity.
In March, a week after Denmark resolved to send a frigate to patrol the Gulf of Guinea, Dakuku penned an emotional letter in Nigeria’s Premium Newspaper saying that continued governance dysfunction in the Gulf of Guinea would have far-reaching implications to the status, stature and sovereignty of West African nations. According to Dr.Dakuku, this would be most pronounced for Nigeria, the largest economy in the jurisdiction.
“When small countries like Denmark provide security to Gulf of Guinea, what does that say about Nigeria’s image as Africa’s economic giant?,” asked Dr. Dakuku. :Nigeria built a strong reputation as a regional power within West Africa in the recent past. But with the current spate of insecurity and piracy, this reputation is gradually fading away. It is the high time Nigeria worked collaboratively with sister nations around the Gulf of Guinea to provide adequate security for the maritime sector.”
U.N. Security Council Explores Ending Somalia Anti-Piracy Resolution
U.N. Security Council reauthorized anti-piracy efforts for only three months off Somalia (Jason R Zalasky/US Navy file photo)
The U.N. Security Council appears to be preparing to officially bring to a close the more than a decade’s long mission for international naval forces fighting piracy off the Somali Coast in East Africa. The Council voted last week to only reauthorize the mission for three months, while cautioning that proper mechanisms needed to be in place to ensure that there would not be a resurgence in activity.
Recognizing the steady decline in attacks and hijackings since 2011 and saying although piracy off the coast of Somalia has been “repressed,” Security Council members however said that the ongoing threat of resurgence remains. The U.N. adopted its first resolution to fight Somali piracy nearly 15 years ago, with the European Union, U.S., and other naval forces launching their coordinated efforts in the region in December 2008. The Security Council has continued to reauthorize the mission annually despite the decline in activities. In debating the new resolution, the Security Council acknowledged that “there has been no successful hijackings for ransom reported since March 2017” commending the broad naval coalition and efforts of the African Union for their counter-piracy activities.
Somali representatives speaking before the Security Council also highlighted the success of the efforts saying that they believed the time had come to end the U.N. efforts and restore sovereignty to their waters. The Associated Press reported that Somalia’s U.N. Ambassador Abukar Dahir Osman told the council, “We believe that the Security Council resolutions on piracy and armed robbery off the coast of Somalia have successfully achieved its intended objective.”
Permanent members of the Security Council, however, spoke out regarding the dangers and saying that the mission remains a critical deterrent. The United States, which sponsored this year’s resolution, objected to efforts to end the resolution while France spoke of the potential “security vacuum,” saying it believed three months did not provide sufficient time to ensure a long-term structure to maintain stability in the region.
After negotiations between Somalia, the United States, and other council members, the resolution authorized for a further three-month period states and regional organizations cooperating with Somali authorities, to fight against piracy and armed robbery at sea off Somalia. The council called upon all states to “take appropriate actions…to prevent the illicit financing of acts of piracy and the laundering of its proceeds…[and] to criminalize piracy under their domestic law.”
The ambassadors said that investigations and prosecutions must continue for all who “plan, organize, illicitly finance or profit from pirate attacks off the coast of Somalia,” while also calling on Somalia to bring to justice those using Somali territory to launch the attacks. Among the efforts that the Security Council called for from Somalis is to put in place mechanisms to safely return effects seized by pirates and to patrol the coastal waters to prevent and suppress future acts of armed robbery at sea.
The Security Council said it expects to continue the discussions with Somalia and will also be looking for further resolution with the African Union to ensure that the long-term structure is in place for the stability of the region. Somalia, for its part, is proposing bilateral agreements starting in 2022 to replace the broader U.N. Security Council resolutions.
UN: Despite Lull in Attacks, Somali Pirate Threat is Still Real
Somali pirates depart a hijacked merchant ship, 2008 (USN)
The United Nations has adopted a resolution for continuous vigilance against threats of maritime piracy and armed robbery on the coast of Somalia. Piracy networks remain active despite long-running suppression efforts.
Despite the infrequency of attacks in the region and the reduction of the designated High Risk Area (HRA) in August, a UN Secretary General report on the situation suggests that threats remain along the Indian Ocean coastline because pirate cells are still active.
In early November, the UN Security Council adopted a resolution condemning piracy and armed robbery at sea off the Somali coast and underscored that it exacerbates instability by introducing “illicit cash that fuels crime, corruption and terrorism.” The Council said that investigations and prosecutions must continue for all who “plan, organize, illicitly finance or profit from pirate attacks off the coast of Somalia.”
The UN Secretary-General’s latest report on the piracy situation in Somalia illustrates that joint counter-piracy efforts have resulted in a steady decline in attacks and hijackings since 2011, but notes that threats remain real.
The report - which covers the period from November 1 2020 to October 31 2021 - shows that no incidents of piracy were reported in the regional waters around the Somali coastline. However, an armed attack against a vessel occurred approximately three nautical miles off the coast of Middle Shabelle on August 13. Some member states also observed suspicious approaches towards merchant vessels in the region, indicating that progress achieved in combating piracy could be reversed if not consolidated.
“The continued absence of successful piracy attacks off the coast of Somalia demonstrates the effectiveness of the measures applied to combat piracy and armed robbery at sea . . . Nevertheless, the continued presence of pirate action groups and networks remain of concern and highlight that piracy has yet to be fully eradicated,” stated the report.
Multiple threats to maritime security remain, with piracy networks having shifted their focus to less risky activities - like smuggling, which also requires attention from the international community.
Though maritime piracy is at near-zero levels along Somali shores, illegal, unreported and unregulated fishing remains common. This crime is hindering multilateral efforts to foster sustainable fisheries.
Attacks attributed to Somali pirates peaked in 2011, when 237 incidents were recorded. The number fell dramatically to just 14 between 2015 and 2020, a drop widely regarded as a result of joint efforts to reduce crimes at sea.
CRIMINAL CAPIITALI$M; PRICE GOUGING
Report: Shipbuilding Cost for Canada’s Icebreakers Skyrockets to C$7B
Costs for Canada’s long-delayed plan to build new, large icebreakers have reportedly skyrocketed according to a new report from Canada’s Parliamentary Budget Officer. The report suggested that costs have risen by seven times as the government went from one to two large icebreakers and that the price remains sensitive to further delays and cost overruns. The new icebreakers appear headed into a political sea more difficult than any ice they might encounter.
Canada’s federal government first announced plans in 2008 to build a new icebreaker costing C$700 million to replace the largest vessel in the Canadian Coast Guard’s fleet, the CCGS Louis S. St-Laurent, which entered service in 1969. The 11,345 gross ton vessel would have been replaced by the modern vessel, but the project encountered delays. By 2013, costs had risen to C$1.3 billion. The government withdrew the contract for the construction in 2019 as the selected shipyard encountered problems delivering on other government contracts.
“We estimate the total cost of the icebreaker project at C$7.25 billion, inclusive of project management costs of C$346 million, design costs of C$820 million, and acquisition costs of C$6.1 billion,” said Yves Giroux of the PBO in a report released on December 16. The federal government is yet to release its estimate for the cost of the vessels.
The cost increase includes the doubling of the project to two large vessels, which the federal government first announced in May 2021. The new plan also called for one of the vessels to be built on the Pacific coast and the other on the Atlantic. The PBO report estimates that splitting the contact to two or three shipyards would result in a loss of economies of scale and experience learned in the project. They estimate the added cost at between C$600 and C$800 million by splitting the construction and also highlighted a “significant premium,” because of the government mandate to build the ships domestically.
Based on the recent experience of the Government of Canada’s shipbuilding procurement initiatives to date, as well as competing priorities at the partner shipyards, the PBO reports that it assumes that construction activities for the first of the two ships will begin within the 2023-2024 fiscal year, with the second beginning in the following fiscal year. Deliveries of these vessels are anticipated for 2029-2030 and 2030-2031, respectively.
Timing for the first of the two vessels is considered critical as the older vessel is currently slated to retire in 2030. Delays in the effort to build the new icebreaker and renew other parts of the existing fleet have already strained the Canadian Coast Guard. Reports indicate that warming ocean temperatures have created a greater need for icebreakers. The Canadian Coast Guard recently purchased existing vessels in the secondhand market, including recently a commercial light icebreaker to help address the need for capabilities.
The PBO in its report warns, “A sensitivity analysis suggests that delays of either one or two years in the start of the construction for both vessels at each partner shipyard would increase total project costs by C$235 million or C$472 million, respectively.”
The announcement in the spring that the federal government planned to double the order was met with calls that it was politically driven, especially with the splitting of the order. Political critics are expected to highlight the dramatic cost increase and cost to taxpayers over the government’s inability to complete the project as another example of excessive spending.
Report: AUKUS Nuclear Sub Program's Cost Could Balloon to $120B
A U.S. Navy Virginia-class nuclear-powered attack sub. The Virginia design is among the options under consideration for Australia's program (USN)
Australia's plans to build nuclear-powered submarines using technology provided by the U.S. could cost a staggering $122 billion to implement, according to an analysis by a top think tank.
In a new report, the Australian Strategic Policy Institute (ASPI) determined that the most economic approach for implementing the Australia–UK–US submarine partnership (AUKUS) that was signed in September would cost about $83-92 billion. This "economic-build" option assumes that the subs would be built in Adelaide and that they would be constructed in parallel on a rapid delivery timeline.
If the subs are built sequentially using a "continuous-build" approach, with one delivery every three to four years, construction would take longer and the total delivered cost would be higher - between $109-122 billion, including the effects of inflation.
“This new enterprise will be a massive undertaking and probably the largest and most complex endeavor Australia has embarked upon. The challenges, costs and risks will be enormous. It’s likely to be at least two decades and tens of billions of dollars in sunk costs before Australia has a useful nuclear-powered military capability,” states the report.
The cost drivers include both the U.S. and UK moving to bigger submarine designs; choice of build strategy; and the broader support system and infrastructure needed to operate nuclear submarines. The authors added that once those cost drivers are fully understood, it is entirely possible that the estimates could grow significantly, putting a heavy burden on taxpayers.
In September, the Australian government announced that it would acquire a nuclear-powered submarine (SSN) capability with support from the UK and the U.S. With little notice, it abandoned a previous diesel-electric sub deal with France; this preexisting arrangement was already facing the possibility of cancellation because of concerns over schedule and capability. Its acquisition cost would have been in the range of $40 billion in constant dollars, though cost growth was a growing concern.
Under AUKUS, the Australian government has indicated plans to acquire at least eight nuclear-powered submarines with a size range of between 7,000 tonnes and 10,000 tonnes.
According to ASPI, the decision by Australia to invest in the lethal, high capability subs was largely informed by the shifting military balance in the Indo-Pacific region, where China is using “military power and intimidation to achieve its ends."
“The Australian government has assessed that the risks and uncertainties associated with China’s continued aggression towards and coercion of its neighbors warrant taking the significant political and economic risks associated with this decision,” stated the report.
Australia sees nuclear-powered submarines as a significant deterrent given their clear superiority over conventional submarines, particularly their speed, endurance and ability to generate time on station.
As an example, the report noted that it takes a diesel submarine 20 days to reach the South China Sea from a base at HMAS Stirling in Western Australia, then another 20 days to return - leaving just 11 days on patrol. During that time, the submarine would need to break the surface multiple times to recharge its batteries, exposing it to detection from ships, submarines, aircraft and satellites due to its increased radar, noise and heat signatures.
In comparison, a faster nuclear submarine would take around seven days to reach the area of operations and require another seven days to return, allowing 75 days on patrol with its greater endurance. That would represent 600 percent more time on station for a single mission, and at no time would the submarine need to break the surface.
Abandoned for Christmas: Fishing Crew Left in Limbo for Nine Months
Nine months after the Kenyan-flagged fishing vessel Ra'Horakthy was abandoned by her owners at the port of Mombasa,10 crewmembers are still stuck on board, awaiting the resolution of a court case that will determine whether they can recover their wages.
The vessel's owners stopped paying wages in March 2021, then ceased providing food and fuel. Maritime charity Stella Maris has stepped in to supply the crew with cooking oil, rice and meat, and it is advocating with local authorities on their behalf.
The crew's Kenyan and Tanzanian members have already been paid and repatriated, and six Indonesian crewmembers flew home with the help of the Indonesian Embassy on December 15. 10 Korean and Vietnamese crewmembers remain on board, including the captain, Seo Hyundo.
“It is very distressing that the remaining ten seafarers will spend Christmas away from their families. The delicate humanitarian situation that the seafarers are in should rightfully prompt the fast tracking of the case to a just and quick conclusion,” said Stella Maris' Mombasa director, Margaret Masibo. "We are concerned with how long the court case will take, and the financial struggle and psychological strain on the crew and their families."
The case illustrates a wider problem of seafarer abandonment, Stella Maris said. According to the ILO Abandonment of Seafarers database, 66 ships have been reported abandoned since the start of 2021. Seafarers' unions and welfare organizations are often the first responders in these cases, advocating for the victims and providing them with supplies when low-end shipowners walk away.
