GERMAN YARD LOSES TT-LINE CONTRACT

Tasmanian Government-owned TT-Line, which maintains year-round Bass Strait sailings using large, fast vessels, confirmed that it had signed a memorandum of understanding with RMC after a considerable period of uncertainty as to FSG’s ability to deliver the ships originally ordered in May 2018.

Both TT-Line and FSG sides have stated that the annulment of the deal was mutually agreed. Recent reports from Germany have indicated that the yard has continued to struggle to secure export guarantees, pending a critical assessment of the shipbuilder’s prospects.

TT-Line chairman Michael Granger said “No payments to FSG have been made, and no payments will be made.” The company will now commence contract negotiations with RMC, and draw up final design specifications. This will include finalising delivery dates, for which the MOU targets late 2022 for hull one and late 2023 for hull two.

Nominated with LNG dual-fuel propulsion, and dimensioned for 1,800 passengers and 600 vehicles, the 212-metre newbuilds from FSG had been due in 2021. The two existing, 27-knot mainstays of the Devonport/Melbourne service are already emissions compliant as was required by 2020, and can accordingly continue to operate well past 2021 in keeping with the higher standards.

Mr Grainger observed that the majority of work undertaken on the new vessels by TT-Line and its technical consultants was transferrable and would be utilised in the detailed design phase and contract negotiations with the new shipbuilding contractor.

FSG ranks as a world leader in the design and construction of ro-pax and ro-ro freight vessels, and also has a long track record in other and specialised ship types.

However, problems and delays in constructing a large ro-pax ferry for Irish Continental Group were attributed to the shipyard reaching serious financial problems in early 2019. This impacted on the delivery schedule for other newbuildings, including a long delay to an LNG-fuelled ro-pax ferry ordered by Brittany Ferries.

In February 2019, the Flensburg shipyard’s Norwegian parent SIEM Group agreed to the sale of 76% of the shares and partnership interest in FSG to global investment company Sapinda Holdings. Under the agreement, Sapinda was to inject EUR 33 million(US$ 36m)of new equity into FSG. Last September, Tennor Holding(formerly Sapinda) acquired all remaining shares in FSG from SIEM Europe, to become the sole owner of the shipyard.

In reference to last week’s loss of the EUR 438 million(US$483m) TT-Line contract, FSG’s managing director Alex Gregg-Smith said “This decision has been taken with the mutual consent of all parties concerned and is part of our re-orientation of FSG as we focus on building high-quality products on time and on budget.”

RMC was established by private investors with local backing soon after STX Finland closed the Rauma shipyard in 2014. As well as building hull modules for Meyer Turku and carrying out conversion and refit projects, RMC has attracted a succession of ferry newbuild and small naval vessel contracts.

It said that the TT-Line project would have an employment value totalling around 3,500 person-years and foresees construction starting at the beginning of 2021. “Building these vessels is a natural continuation to the similarly-sized MyStar, for the Tallink Group,” affirmed RMC’s CEO Jyrki Heinimaa. “During the next few months, TT-Line and RMC will be working in close cooperation to finalise the contract …….The design of the vessels will begin in the autumn of this year.”

Work in hand at Rauma features a ro-pax for trans-Baltic service with Wasa Linien, to be followed in April by the keel laying of the MyStar, destined to run between Finland and Estonia.

The envisaged Australian pair will sail under TT-Line’s Spirit of Tasmania brand, and will supersede the 194-metre sisters Spirit of Tasmania I and II(the former Superfast III and Superfast IV), built at Turku, Finland, in 1998.