Guarded optimism

Australia?s shipbuilders hope to chart smoother seas next year after weathering a year of turbulent waters. The past year has been marked by redundancies at major yards and reduced profits, as the global downturn in demand for fast ferries caused big gaps in the order books for builders on both the west and east coast of the country. A sunnier outlook for 2002 is fuelled by high inquiry levels for ferries and a recent boost to orders for west coast yards, Austal Ships and Wavemaster. Executives at Wavemaster International, NQEA and Sabre Catamarans, have told The Motor Ship their inquiry levels pointed to rising demand for smaller passenger ferries rather than the vehicle/ passenger craft. Sabre Catamarans managing director Bill Harry said his yard, which specialised in vessels under 40m, was sourcing consistent contracts by marketing vessels accommodating around 200 passengers. “I don?t think I?d even bother trying for the larger vessels because ferry operators now seem more keen to have smaller ships and make more regular trips,” Harry said. However, Incat?s managing director Robert Clifford, who was forced to retrench 200 workers earlier this year, suggested orders would begin to flow again in 2002 for craft above 86m. Incat had secured charters for three of its vessels but not made a single sale during 2001, he said. “I believe the very healthy level of inquiries received all year will translate into firm orders next year. Unfortunately this will happen when the customer is ready and not when we are ready,” Clifford said. A more cautious Bob McKinnon, who is Australian Shipbuilders Association chairman and managing director of Austal Ships, said he suspected the larger end of the car ferry market would remain tight for some time. Austal, which has secured A$160 million ($83 million) worth of work since June, has recruited replacements for the 200 workers retrenched earlier this year and now employs 1,250 people over the group in Australia. “Apart from the 86m vessel for Conferry, the vessels were at the smaller end of the market,” said McKinnon. “Inquiry levels are improving, but not really for the larger vehicle passenger ferries.” Lobbying continues Industry leaders will continue lobbying the conservative Australian Government, which was re-elected on November 10, to ensure they are not disadvantaged by European subsidies. McKinnon said he met with both members of the Government and Opposition prior to the election to seek additional support if European builders were granted the 14% subsidy to safeguard against alleged unfair Korean practices. The only subsidy available to Australian builders is 2% rebate on research and development under the Government?s Shipbuilding and Innovation Scheme. “We received a good hearing, but certainly did not obtain any commitments on this one,” McKinnon said. Incat?s Robert Clifford questioned whether the Australian Government was sincere about supporting its shipbuilding industry. Clifford said the Government had shown little understanding of the difficulties posed by the subsidy issue and it seemed both political parties had avoided addressing the issue prior to the November election. Patrol craft orders The defence and patrol sector is expected to provide relief for the lull in car ferry orders with both Austal and Incat gaining a foothold into this potentially lucrative arena with United States military contracts. Australia?s domestic market is also expected to provide a source of orders as higher coastal surveillance is demanded by Australia?s soaring illegal migration problem. The A$450 million Royal Australian Navy?s contract for 15 new patrol boats will generate several years worth of work for the winning tender. These 50m craft will replace the Fremantle-class vessels built during the late 1970s and early 1980s by Queensland yard, NQEA. A bid for this project is now being made by NQEA and also Wavemaster, Austal-Defence Maritime Services, Tenix, Australian Defence Industries and Australian Submarine Corporation. Australian Defence Industries (ADI) ? a joint venture between Transfield and Europe?s Thales group ? has proposed an advanced composite fibre vessel, derived from the Danish Navy?s proven Stadflex patrol boat. NQEA will use its track record in servicing the Royal Australian Navy in pitching for the latest contract. n