Germany throws lifeline to local shipbuilders

The German government will bring forward investments in ships to help its troubled shipyards to survive the current downturn. According to Minister of Transport Wolfgang Tiefensee, old state-owned vessels should be scrapped earlier than originally planned so that new ships can be ordered promptly.

Newbuilding contracts worth ?160m ($211m) will be awarded in the coming two years. This year, the government plans to invest ?80m in new vessels for the country’s water and shipping authorities. In the main, tugs, buoy-laying vessels and pilot boats will be replaced. Among the biggest orders due next year is the one to replace the multi-purpose vessel Scharhörn, operated by Lübeck’s shipping authority. The 1974-built vessel is used to fight oil spills.

Conditions at German shipyards are tense at the moment. “New orders are imperative to keep the shipyards busy, but there are virtually no new orders at present,” said maritime co-ordinator Dagmar Wöhrl. According to figures issued by the German ministry for the economy, only 46 ships were ordered from German shipyards in 2008, compared with 157 vessels in the boom year 2005.

Shipyards saw cancellations of 29 vessels worth ?730m in 2008. Another 11 worth ?737m were cancelled between January and the end of March 2009. Orders for more than 20 vessels with a value of ?1bn are at risk, as shipowners were not able to secure the necessary funding. Since the beginning of the financial crisis Lindenau, Cassens, SSW and the small SMG Werft shipyards have filed for insolvency.