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December 2004

Dismay over Malaysia port move
INDUSTRY sources reacted with dismay today at Malaysia’s reported decision to set up a port commission to oversee the working of major ports. “This is a negative step,” a source close to a major port told Fairplay. “The growth of Malaysian ports has been driven by individual enterprise and to go back to bureaucratic control is a step backward,” the source commented. The Kuala Lumpur daily New Straits Times reported transport minister Chan Kong Choy as saying that the ministry is drafting the Malaysian Port Commission Act. It is expected to be tabled in parliament early next year. The proposed commission will be the sole, authoritative body governing all major ports in the peninsula, Bintulu and Labuan. Ports that will be covered include Port Klang near Kuala Lumpur and Port of Tanjung Pelepas in southern Johor state, which is competing with Singapore for transhipment containers. The Commission’s responsibilities will encompass “everything” from planning to marketing to promotion, Chan said. © Lloyd's Register - Fairplay Ltd 2004.

PSA steps into Hong Kong
PSA International has finally succeeded in making inroads into Hong Kong, the world’s number one container port. The Singapore based terminal operator confirmed in a statement that it has agreed to buy a 57% stake in Asia Container Terminals from Sun Hung Kai Properties. ACT owns two terminals in Hong Kong. The spokesman did not mention any amount, but the South China Morning Post reported that the purchase price is HK$2.6Bn ($334M). The Hong Kong daily quoted a SHKP spokesman as saying that Sun Hung has agreed to sell its stake to PSA, which is said to have assumed SHKP's portion of ACT's debt estimated to be HK$600M. The surprise development has come soon after the Hong Kong property firm had beaten PSA for Hong Kong Land Holdings’ 28.5% stake in ACT. PSA International currently operates 17 port projects in 11 countries. © Lloyd's Register - Fairplay Ltd 2004.

ASEAN-China in landmark trade deal
ASIAN countries yesterday took concrete steps to establish what is described as the world’s largest free trade area and set up a European style common market. Leaders of the ten-member Association of South-East Asian Nations (ASEAN) signed an agreement with China yesterday to remove tariffs that would benefit two billion people and open the way for free trade. The accord was signed in the Laotian capital of Vientiane, which is also the venue for the ASEAN summit. Countries grouped under ASEAN also signed their own pact to create a trade bloc by 2020 that would rival Europe and North America, agencies reported. The ASEAN-China agreement seeks to abolish all tariffs by 2010 and is part of a wider co-operation in transport and security among others. Two-way trade is expected to surpass $100Bn this year. ASEAN has also planned free trade areas with Japan and Korea and an economic agreement with India. Trade ties with Australia and New Zealand, who were also invited to the summit, will also be strengthened. © Lloyd's Register - Fairplay Ltd 2004.

Malaysia revives plan to create national port authority by Marcus Hand
MALAYSIA has revived a controversial plan to create a national port authority. Malaysian Transport Minister Datuk Seri Chan Kong Choy told a media conference yesterday that all the major ports in the country would come under a new National Ports Commission. Six port authorities in the country - Penang, Port Klang, Johor, Kemaman, Kuantan and Bintulu — will hand over their duties to the commission. This would see Malaysia’s two largest container ports, Klang and Tanjung Pelepas coming under the same national authority. It is not the first time that Malaysia has attempted to create a national port authority. Previous Ling Liong Sik, tried to set up a Malaysian Ports Commission in 2001. The proposal met with strong opposition from Malaysian terminal operators who feared possible changes to their operating concessions and was eventually shelved. No time frame for the creation of the new ports commission was given by Datuk Chan. © 2004 Informa UK Limited.

Malaysian shipowner Halim Mazmin Berhad (HMB) has delivered the first of two containerships it is selling to Mediterranean Shipping Co (MSC) by Dale Wainwright
In a statement to the Kuala Lumpur Stock Exchange HMB said the 2,680-teu MSC America (built 1993) was delivered to MSC on 29 November. HMB is taking advantage of the hot boxship market to sell both the MSC America and MSC Tasmania (built 1993) for a total of $60m Both ships, which are on time charter to MSC, were acquired in 1997 for $35m each. The MSC Tasmania is deployed in the Europe-US trades while the MSC America is operating on the Asia-Europe route. HMB expects to make a gain of about MYR36.4m ($9.6m) on the sale of the two ships, with the proceeds directed towards fleet expansion. The Malaysian shipowner is also taking advantage of the hot bulker market to sell its 149,475-dwt bulker Meridian Polaris (built 1993) for $37.4m. The Meridian Polaris, which was built by Taiwan's China Shipbuilding Corporation (CSBC), is 49% owned by Japanese shipowner NYK. © TradeWinds.no

Singapore's MPA has introduced new limits on the quantity of dangerous goods permitted aboard vessels berthing at its quays
Singapore's MPA has introduced new limits on the quantity of dangerous goods permitted aboard vessels berthing at its quays. The details are contained in a Marine Circular issued last Friday (Port Marine Circular No 25 of 2004) and replace a circular issued in 2001. The limits concern dangerous goods classed by MPA as Group I material, including methane, ammonium nitrate and substances of Divisions 2.1, 4.2, 4.3, 5.1, 5.2 and 6.1 and Class 3 with a flashpoint below -26°C. Full details can be found at www.www.mpa.gov.sg/circulars_and_notices/pdfs/pc04-25.pdf. © 2004 HarzardousCargo.Com.

MISC offloads 32 bulkers to Restis group by Mark Warner
MALAYSIA International Shipping Corp has agreed to sell 32 bulk vessels to the Victor Restis-led First Financial Corp for $740m as it focuses on its energy business. MISC, the world's largest carrier of liquefied natural gas, will book a gain of $440 million from the sale, which was carried out in a closed tender, the company said in a statement. Delivery of the ships is due to be completed by March 31, 2005. MISC, 62 per cent-owned by state oil and gas firm Petronas, had earlier this year reaped an exceptional gain of 320.6 million ringgit from the disposal of 17 vessels. First Financial, currently has a fleet of 31 vessels — including 13 capesize and nine handysize bulkers as well as nine reefers. Most of its bulker fleet has been built since 1996, with the latest additions being a series of three 172,000 dwt double hulled capes — Glorius, Olympius and Victorius — delivered from Hyundai this year. Shares of MISC closed 0.7 percent down today at 14.50 ringgit. © 2004 Informa UK Limited.

Restis set to take MISC buy in stride: acquisition confirms group’s status as a major dry bulk player by Nigel Lowry
Shortly after clinching the $740m deal to buy Malaysian International Shipping Corp’s remaining dry bulk fleet of 32 vessels, First Financial Corp’s head, Victor Restis, paid tribute to group founder Stamatis Restis, who died unexpectedly earlier this year. “We are very excited, of course,” he said. “It is just a pity that my dear father is missing this.” However, he added, “it is a tremendous boost for our morale and shows that the company is going ahead full steam”. For anyone who might not have noticed hitherto, the acquisition will confirm the Greek group’s status as a major player in the dry bulk market. It entered the sector proper just five years ago with the acquisition of South Africa Marine Corp that gave it an initial fleet of 13 young bulkers. But its presence has been steadily built up since then with newbuildings, including double hulled capers, and the activation of several operating joint ventures. Mr Restis declined to comment on the price or details of this week’s transaction with MISC, although he did say that he felt the group’s “proven record of executing complex and large transactions” helped its bid for the Malaysian fleet. Although some analysts have cautioned over high market prices for dry bulk tonnage — and MISC itself is said to be booking a massive profit on the sale — reportedly intense competition from major players interested in the en bloc deal speaks highly of the attractions. For First Financial Corp, the holding company for the Restis group’s dry cargo interests, the allure of the specific vessels appears to have been various. While the company is already strong in capesizes and has a presence in the handymax sector, the deal also promises to fill a gap with MISC’s nine panamaxes as well as boosting it to a leading player in the handysize segment. “For different reasons all of the vessels were attractive to us,” confirmed group chief financial officer Kostas Koutsoubelis. He also pointed out that the smaller ships had an added interest as being “the least volatile dry bulk sector”. It is understood that only a handful among the 32 ships will be handed over to the Greek group over the next three to four months with period charters still attached, the vast majority being deployed by MISC in the spot market. It is likely that the group will absorb the new tonnage by employing vessels both through operating affiliates and direct chartering to third parties. Both First Financial subsidiaries Safbulk and 60%-owned Safore are, for example, operators of panamaxes and handysizes. The group also has a 50% involvement in Swiss Marine, a Geneva-based operator of both capes and panamaxes that is a major charterer. A complementary venture for the handymax and handysize market segment is Safmur Logistics, in which Restis has partnered Macsteel subsidiary Metall und Rohstoff Shipping, which manages the company. The partners contributed an initial three vessels to the fleet but overall Safmur is said to operate more than 20 vessels. According to Mr Koutsoubelis, the group believes the bulk market will continue strongly for the foreseeable future but its strategy will curb its exposure to ‘downside risk’ from the huge acquisition. © 2004 Informa UK Limited.

MISC sells its bulk carriers
MALAYSIA International Shipping Corp has sold 32 dry bulk carriers to First Financial for $740M. The agreement for the ‘en-bloc’ disposal was signed today, MISC said in a statement to the Kuala Lumpur Stock Exchange. “The aggregate disposal consideration for the sale is expected to result in a gain on disposal of $440M over the aggregate net book value of the vessels,” MISC stated. Handover of the vessels is expected to be completed by 31 March 2005. The gain matches the amount paid by MISC for the purchase of American Eagle Tankers from Singapore’s Neptune Orient Lines last year. MISC, which is a subsidiary of state-owned oil and gas major Petronas, is looking to focus on energy transport. Earlier, MISC had sold 15 ships to Thailand’s Handysize operator Precious Shipping. While an exit from the bulk sector is all but completed, there is talk that the company might also move away from the liner business. The agreement with First Financial was made after a closed tender. © Lloyd's Register - Fairplay Ltd 2004.

Asian workers shun career in seafaring: Asian Shipowners’ Forum identifies barriers of continuing victimisation and the perception that seafarers are a security threat by Sam Chambers
ASIAN workers are turning away from seafaring, the Asian Shipowners’ Forum seafarers committee has warned. Among a raft of issues discussed by the committee, which concluded its 10th interim meeting in Jakarta, the two most important problems identified were the ongoing victimisation of seafarers in the ramp up in shipping security as well as the decreasing numbers of Asians willing to take to sea. In a meeting that one insider described as “one of compromise” among the 12 Asian nations involved, the committee said it was “seriously concerned that seafarers are being seen as potential security [threat] and consequently victimised at a time when the ISPS code has recognised their vital role at the heart of maritime security”. The ASF urged the US to ease its demands that all seafarers appear in person at US consulates to obtain visas in the wake of the abolition of crew list visas by the US. “The meeting considered this will give a negative signal to other governments that are considering whether to ratify the ILO convention,” it said. “The meeting urged Asian governments to encourage the United States and other administrations to accept the new ILO 185 identification document to facilitate entry for purpose of shore leave and transit to and from vessels.” Just as alarming were the results from a manpower survey carried out by the ASF, which concluded that “there is a serious shortage of national seafarers in Asia, in particular engineer officers. The average age of national seafarers in Asia has increased due to insufficient intake of national officer cadets, an insufficient number of applicants and a lack of funding.” © 2004 Informa UK Limited.

Six kidnapped in pirate raids
Six more tugboat crew members have been taken hostage in two incidents in the Malacca Strait as violent pirate attacks continue unabated in the busy waterway. Recent months have seen a spate of attacks by groups of heavily armed pirates on slow moving tugboats in the northeast of the strait with crew members kidnapped for ransom. With pirates showing little fear, the attacks are taking place in broad daylight rather than in the dead of night as in the past. The latest attack took place on November 30 at around 1425 hrs as a Malaysia-flagged tugboat was towing a cement-laden barge in the northern part of the strait, The Straits Times reported. In a large scale attack around 50 pirates in fishing boats surrounded and fired at the tug. The pirates kidnapped the tug’s captain and chief engineer and also stole the boat’s documents and other valuables. © 2004 Informa UK Limited.

Smit to bring in armed guards as number of pirate attacks increase
MALACCA STRAIT - Dutch salvage and towage firm Smit is set to introduce armed guards on its vessels in a bid to combat the increasing number of pirate attacks. Armed security personnel will be hired to escort vessels in danger areas such as the South China Seas, Malacca Straits and in West Africa, Nigeria and Gabon. Additional surveillance equipment and infra-red binoculars have been introduced. Other short-term measures included avoiding the high-risk areas and introducing an electric security fence to stop people climbing on board. The operator's tough response follows an incident last month when the 75 m SmitWijs Londoncame under machine-gun fire while carrying out a towing job in the Malacca Straits. Crew members were forced to defend themselves with flare guns. © tfinforma.com.

Sale of dry bulk fleet may boost MISC credit rating
MALAYSIA - Malaysia International Shipping Corp's credit rating from Standard & Poor's could be raised following the $740m sale of its dry bulk fleet. Ratings agency S&P placed MISC's BBB+ long term corporate credit rating on CreditWatch with positive implications. S&P also placed the Malaysian company's $1.3bn in unsecured notes on CreditWatch positive after it announced plans to sell its 32-strong dry bulk fleet to Restis for $740m. With MISC booking a profit of $440m on the deal, while bulk shipping only accounted for 7% of its pre-tax profits in the first half of the financial year ending March 31, 2005, S&P now sees a potential strengthening of MISC's financial profile. "More importantly, proceeds from the sale are likely to be directed towards the prepayment of higher interest-bearing debt," said S&P credit analyst Ee-Lin Tan. "Furthermore, part of the proceeds will be used to fund MISC's upcoming vessel purchases, necessitating less future borrowings," added the credit analyst. © tfinforma.com.

MISC in joint venture in Nigeria with Allseas Intercontinental Shipping by Marcus Hand
MALAYSIA International Shipping Corp is targeting the Nigerian shipping market with a new joint venture. The Malaysian national shipping firm has taken a 60% stake in a newly formed venture MISC Nigeria Ltd, with Allseas Intercontinental Shipping Ltd, Nigeria taking the remain 40%. MISC said the venture would explore the possibility of and jointly participate in maritime transportation, integrated logistics services and shipping related businesses in Nigeria. The Malaysian company, which just last week approved a US$740m sale of 32 bulkers that will see it exiting the bulk shipping business, is aiming to become a leading global provider of energy transportation. Nigeria is among the top 10 oil producing countries in the world. © 2004 Informa UK Limited.

Johor Port to deploy project management office
JOHOR BARU: Navigis Sdn Bhd said that it has been contracted to implement a project management office for Johor Port Bhd (JPB). Financial terms were not disclosed. The project management office (PMO) will see the Navigis (www.navigis.com) project managers work hand-in-hand with Johor Port (www.johorport.com.my) staff on a three-year tenure, Navigis said in a statement. They will not only acts as consultants but will also provide training, guidance and best practices to deliver strategic IT projects that will see an increase in reporting and port management efficiency at the port. "We recognise the important role IT plays in ensuring Johor Port stays globally competitive," JPB's corporate affairs director Dr Lim Meng Soon said. "The PMO is a landmark undertaking for our port in ensuring our IT projects consistently exceed our expectations," he added. The PMO will ensure consistent project management processes are undertaken, minimise the possibility of failure, and maintain a more efficient and closer monitoring of IT projects. It will identify critical areas in the port's IT projects and boost overall IT efficiency while limiting costs and delivering projects within budget and in shorter time frames, claimed Navigis, a subsidiary of Mesiniaga Bhd. "PMOs help executives by providing the structure needed to standardise project management," said Navigis chief executive officer Philip Sidebottom. "Once standardised, project performance can be closely measured and monitored. Then, corrective action can be taken to mitigate risk and substantially increase the odds of project success," he claimed. JPB believes the PMO will save it money by enabling better resource management, supporting projects that offer the biggest return on investment, and ensuring steadily rising profits. © Star Publications (M) Bhd.

IMC bulker breaks up
The US Coast Guard (USCG) is searching for rescue personnel and seafarers in the Aleutians after the grounding of a panamax and the crash of a responding rescue helicopter. Manager IMC Shipping says the 73,000-dwt bulker Selendag Ayu (built 1998) is breaking up on the rocks but cannot confirm a USCG report that it has already broken in two. Four USCG helicopter crewmen and six seafarers were initially reported to be missing but now at least four of the 10 are said to have been recovered by the cutter Alex Haley and flown to Dutch Harbor, Alaska for medical treatment. Unconfirmed reports indicate that five of the six still missing are IMC crew and one is a USCG responder. The vessel was crewed by Indian officers and Filipino ratings. The Jayhawk helicopter from a Kodiak base was evacuating crew from the Selendang Ayu when it crashed. IMC says in an announcement that the ship had begun drifting toward Unalaska Island in the Aleutians some 48 hours after its main engine quit. The master and a USCG rescue swimmer were the last to be evacuated. They remained on board the ship after 19 crew had been airlifted to safety and after the helicopter crash. Managing director LP Lim of IMC said in a statement: "IMC wishes to express its hopes for the missing men, any men still in danger or who may face dangers to come and for the courage and dedication of the United States Coastguard and IMC seafarers." The company reports 35-knot winds, swells between five and 25 feet and three miles visibility. Anchorage-based emergency responder Gallagher has been mobilised and is preparing counter-pollution measures. The vessel was said to be carrying soybeans bound for Japan. US media report that it is carrying 440,000 gallons of bunkers, which had been transferred to inboard tanks and was unheated so as to allow it to thicken and diminish the risk of environmental pollution. The ship sails in the IMC Transworld pool of geared panamaxes. It is classed by the American Bureau of Shipping and insured by the Swedish Club. The tugs Shelley Foss and Redeemer have been dispatched to assist the Alex Haley. A USCG video is available at the uscgresponds.com website. © TradeWind.Com.

Search continues for six missing crew off Alaska
THE search is continuing for the six missing crewmen of the bulker Selendang Ayu as officials from owners IMC Group and other parties fly to Alaska to determine their next move. An official from IMC in Singapore said they had no additional information on six crew members who are missing after a US Coast Guard rescue helicopter flying them to safety crashed while the stricken bulker they had left broke apart in environmentally sensitive terrain. The helicopter, with a crew of three, was evacuating crew off the IMC Group’s 1998-built, 72,937 dwt, Malaysian-flag Selendang Ayu when it crashed near Unalaska Island. The USCG that Jayhawk rescue helicopters and C-130 fixed-wing airplanes are both scheduled to conduct first light searches this morning for the six missing men. Extensive searches have so far failed to find any sign of the missing crew. Managing director of Malaysian based IMC joint venture, Aurora Tankers, Lim Leng Pin is flying to the scene of the disaster. The vessel is owned and flagged in Malaysia and part of the Singapore based IMC Transworld panamax pool. In addition to the missing seafarers there is the worry of pollution from 440,000 gallons of heavy bunker oil the vessel had on board. The USCG said that over flights of the Selendang Ayu, which broke in two Wednesday, revealed an oily sheen surrounding the vessel, and that some oil reached. “A vessel is being outfitted and mobilized to do free-oil recovery inside Skan Bay Friday. Attempts to reach the area proved unsuccessful due to the weather and limited daylight,” it said. Goran Rudelius from the Swedish Club in Hong, the vessels P&I insurers confirmed that a salvage company was yet to be appointed. “We are working in full cooperation with the local authorities. Nothing has been decided yet. There are teams of people travelling to the scene," he said. © 2004 Informa UK Limited.

Six seafarers missing after Alaska rescue helicopter crashes
SIX seafarers were reported missing yesterday in a compound tragedy in Alaska. A US Coast Guard rescue helicopter flying them to safety crashed while the stricken bulker they had left broke apart in environmentally sensitive terrain. The helicopter, with a crew of three, was evacuating crew off the IMC Group’s 1998-built, 72,937 dwt, Malaysian-flag Selendang Ayu when it crashed near Unalaska Island, according to a Coast Guard statement. The cause of the crash was not stated. A search for the missing six was under way. Seven of the ship’s 26 crew members were on the helicopter. The three helicopter crew members and one seafarer were picked up by another rescue helicopter from the Coast Guard cutter Alex Haley and taken to Dutch Harbor on nearby Unalaska Island for medical treatment. Their condition remained unknown at press time. Meanwhile, the Coast Guard was gearing up for a possible fuel spill among wildlife habitats and fisheries as frigid water temperature and 30-knot winds posed a challenge to the response efforts. Oil containment equipment was understood to be on its way to Unalaska Island, a breeding ground for sealions and crabs. Lieutenant James Smith of the Coast Guard’s on-site command and rescue centre told Lloyd’s List the Selendang Ayu had broken up in Skan Bay. The agency planned to conduct a casualty and pollution assessment at daybreak, even as weather conditions remained unchanged. The Selendang Ayu had been adrift in the Bering Sea since Tuesday after its main engine broke down for unknown reasons. A tug attached a line to the bulker on Tuesday evening, securing it for about 12 hours. The line broke in heavy winds and 25-foot swells. According to local news reports the bulker was carrying 440,000 gallons of heavy bunker oil and a soybean cargo. The oil was said to have been transferred to inboard tanks and the fuel heaters turned off to thicken the fuel to prevent it dispersing in the event of a spill. The powerless ship came within two miles of running aground on Bogoslof Island and then headed towards Unalaska Island. The crew dropped one anchor when it reached shallow water, but it was sheared off in rough seas. The crew later dropped its other anchor, which temporarily held the ship in place four-fifths of a mile from shore. But around 1800 hrs local time on Wednesday the master requested evacuation as the second anchor had begun to give way and the bulker had begun to flood. The ship was reported to have broken in half at 1915 hrs. Eighteen crew members were evacuated by Coast Guard helicopter separately before the crash. The master, who had stayed behind on the doomed ship along with a Coast Guard rescue swimmer, was also understood to be rescued separately. The crew of 26 comprised Filipinos and Indians, according to the Coast Guard. Swedish Club, the bulker’s protection and indemnity club, could not be contacted yesterday. A statement attributed to L P Lim, of IMC Shipping, said the company “wished to express its hopes for the missing men, any men still in danger or who may face dangers to come and for the courage and dedication of the US Coast Guard and IMC seafarers”. - No injuries but huge damage was reported from an accident involving the German containership MSC Ilona and the Panama-registered vessel Hyundai Advance on Tuesday near the mouth of the Pearl River in South China, writes Bülent Erdogan in Cologne. MSC Ilona's operating company Niederelbe Schiffahrt said the 6,750 teu containership was hit by the Hyundai Advance, which did not obey traffic regulations. The bunker tank on the MSC Ilona was punctured during the collision. More than 450 tonnes of fuel leaked out of the ship, causing a spill.The operating company of the the MSC Ilona expects the vessel to be under repair for the next four to six weeks. © 2004 Informa UK Limited.

Alaska oil pollution fears after bulk carrier tragedy
AS THE search for six missing crew from the stricken Selendang Ayu was scaled back in Alaska at the weekend, involved parties faced up to a new reality — a potentially disastrous oil spill in an environmentally sensitive area. Preliminary reports from the remote region 1,300 km southwest of Anchorage suggested that “thousands of gallons” of oil spilt from the six-year-old bulker when it broke into almost equal halves after drifting powerless for more than two days. Both pieces ended upright and parallel 60 m from the shore near Skan Bay on the western side of Unalaska Island in the Aleutian chain. The area has a wildlife refuge and is a breeding ground for sealions, harbour seals, sea otters, tanner crabs and halibut. Kurt Fredriksson, acting commissioner for the Department of Environmental Conservation, told the Associated Press it was a “major spill that could take months to clean up”. The US Coast Guard said flights over the area revealed an oily sheen surrounding the bulker and that some oil had reached land. Three salmon streams and two lakes threatened by oil were among the areas being monitored and some oiled wildlife had been spotted, the agency reported. The remoteness of the area makes communication with the mainland difficult and hinders swift movement of emergency equipment, according to officials involved with the response. The managing director of shipowner Aurora Tankers, Lim Leng Pin, was at the scene of the disaster. Aurora Tankers is an IMC-Global Maritime Ventures enterprise based in Kuala Lumpur. The 1998-built, 72,937 dwt bulker is flagged in Malaysia and is part of the Singapore-based IMC Transworld panamax pool. The loss of the bulker will have come as a shock and a possible embarrassment for IMC Group chairman Fred Tsao, who also chairs the industry lobby group Intercargo. The bulker was carrying 1,595 tonnes of intermediate fuel oil and 70 tonnes of diesel, reported IMC spokesman Nick Brown. This kind of bunker, number six fuel oil, is dense and viscous and is difficult to clean up according to experts. The class society, American Bureau of Shipping, had no immediate announcement on the casualty. There were also no immediate details on the liability picture resulting. Goran Rudelius, of the Swedish Club in Hong Kong, the vessel’s protection and indemnity club, would only confirm that a salvage company had yet to be appointed. No details were available on why the ship’s main engine stopped functioning. It is understood to be a MAN B&W 6S60MC slow speed engine, manufactured under licence at Hudong Shipyard in China, the Selendang Ayu’s builder. The ship was carrying 60,199 tonnes of soybean, worth $17.5m and loaded in Seattle for China. Reuters reported that Chinese state-owned Sinograin Eastern Economic and Trade Co had confirmed it was in talks with its supplier about payment for the consignment. Meanwhile, rescue efforts for the six seafarers were kept up. Jayhawk rescue helicopters and C-130 fixed-wing aircraft conducted first-light searches for the missing men on Thursday but failed to find any sign of them. The water temperature in the area was 6º Celsius. Expert estimates put survival in these conditions at three hours. Lack of equipment to devote to the response also posed a challenge. But rescue officials said their first priority on Friday was to search for the men even at the expense of combating the oil spill. The six crew members plunged into the sea when a US Coast Guard helicopter flying them to safety crashed at about 1815 hrs local time on Wednesday. Three Coast Guard personnel and one crew were rescued from the water and reported in good condition. The other 19 crew members were also understood to be safe. The cause of the crash still remains unknown. The wreckage of the Jayhawk helicopter was washed ashore further upshore from the stricken bulker, its red fuselage blackened and barely recognisable. © 2004 Informa UK Limited.

Search for missing crew continues
SIX crew members of the Selendang Ayu remain missing today in 5m seas off Unalaska Island in the Aleutians, US. The crew had been evacuated from the Malaysian-flagged bulk carrier when the Jayhawk helicopter they were aboard crashed into the sea. Coast Guard spokesman Jolie Shifflet told Fairplay the water temperature in the area is 6.1 degrees Celsius and winds are estimated at 20kt. Survival at that temperature is estimated at three hours and the men have been missing for well over 12 hours. The search is also hampered by the fact that daylight lasts for only seven hours at this time of year in the area concerned. The wreckage of the helicopter has been found washed ashore in Skan Bay. The grounded vessel has now broken in two. The USCG has reported an oily sheen in the waters surrounding the vessel with some oil washed ashore. The crew is said to have moved bunkers into the most internal and secure tanks before the ship broke up. They also shut down heaters to cause the oil to thicken, a strategy to reduce possible pollution.© Lloyd's Register - Fairplay Ltd 2004

Salvage team board IMC bulker
IMPROVING weather conditions on Sunday allowed a salvage team to get onto the stern half of the wrecked bulk carrier Selendang Ayu grounded off Alaska. The IMC group owned panamax bulker grounded and split in two off an environmentally sensitive area of the Alaskan coast in heavy seas last Wednesday after it suffered an engine failure that started from a cylinder liner crack. On Sunday a United States Coast Guard helicopter was able to get a salvage team onto the stern section stricken vessel. “The team was not able to get onto the bow half of the freighter, but was able to access most of the stern half,” the USCG said. The coastguard said that five of six accessible cargo holds had been breached and that three cargo holds containing cargo of soybeans and the stern fuel tank all had small breaches. One hold though appeared to be intact the coast guard said. Peter Chew, managing director of IMC told Lloyd’s List that coast guard had reported oil was coming out of tank number two which contained about 40,000 gallons of fuel oil, or about one tenth of the 450,000 gallons onboard the vessel. The bulker was carrying 1,595 tonnes of intermediate fuel oil and 70 tonnes of diesel. The salvage crew are now in a race against time to stop the vessel’s bunker fuel from washing up on environmentally sensitive shores. The USCG reported that salvage experts on an overflight on Sunday estimate that there are less than 2,100 gallons of oil visible from the air. A salvage master has been appointed by the vessel’s P&I Club, the Swedish Club and Mr Chew said: “All the experts are there now.” However until Sunday weather conditions had made it impossible to work on the vessel itself. "We are very thankful that we finally have a good day to start getting things done," said USCG Capt Ron Morris. While the exact cause of the engine failure which resulted in the tragedy remains unknown Mr Chew said it had started from a cylinder liner crack. The crew had tried to cut the engine off and repair it to stop water from getting into the engine. Why the engine could not be restarted is not known. As to whether the vessel which was sailing from Tacoma to China could have taken a different more southerly route rather than the Baring Strait in winter, Mr Chew said that this was decided by an ocean routing firm as the vessel was on charter. He noted that around 2,000 vessels a year pass through the Strait. Although weather conditions improved on Sunday came too late for six missing seafarers. The six crew members plunged into the sea when a US Coast Guard helicopter flying them to safety crashed at about 18-15 hrs local time on Wednesday. The search for the six seafarers was called off on Friday night with no hope left of finding survivors in waters of just six degrees centigrade. “The experts say that three hours is the maximum time people will last in these waters,” Mr Chew said. However efforts will continue to recover the bodies of the missing crew members so as to give their families closure. “The coast guard has promised to be vigilant for the bodies,” he said. © 2004 Informa UK Limited.

Search for missing crew suspended
THE US Coast Guard has suspended search and rescue efforts for six missing crew members of the Malaysian bulk carrier Selendang Ayu in Alaska. The seafarers, who were picked up from the grounded vessel were missing after a USCG rescue helicopter crashed into the sea on 8 December. “It is with deep regret and sadness that we note the suspension of the search and rescue efforts for our brave and appreciated crew,” Peter Chew, Group MD of vessel operator IMC Shipping, said in a statement issued from Singapore on Friday. The rescue effort for the six missing seafarers has now become a recovery task as the Coast Guard and others still hope to recover the men’s bodies. On Sunday, the Coast Guard was flying a salvage team to the vessel’s hull – now split in two – in order to inspect the tanks. It has already been determined that one of the bulker's tank has ruptured, pouring some of its 134 tonnes of fuel oil into the frigid waters. © Lloyd's Register - Fairplay Ltd 2004.

Australia plans new security zone
AUSTRALIA is to introduce a stringent new maritime security regime next year, with every vessel entering a 1,000n-mile perimeter zone being obliged to give details of cargo and voyage. The country is seeking to work closely with Indonesia and East Timor in implementing the measures. Shipping Australia chief executive Llew Russell said today that some difficulties could be encountered should interdiction be attempted in international waters when the government's plan is introduced next year. Full stories in LR-Fairplay's port and maritime security news product Sea Sentinel, at www.sea-sentinel.com. © Lloyd's Register - Fairplay Ltd 2004.

Selendang Ayu crew fly home
SEVENTEEN members of the crew of the Selendang Ayu will be flying home today after days of interviews with government officials investigating the grounding and break up of the bulker. Six seafarers died after the helicopter taking them from the stricken vessel crashed into the sea. Salvors were studying the two halves of the ship yesterday and developing a plan to float them away from Unalaska Island. The investigation of the disaster has been transferred from the US Coast Guard to the National Transportation Safety Board, which investigates accidents where six or more people die. Two good weather days on the 13 and 14 December allowed for both a memorial service for the lost seafarers and for a booming operation to contain oil from a ruptured tank containing 133 tonnes of fuel oil. Officials at the site told Fairplay that some oil has been seen in the water and on nearby beaches, but far less than the full contents of the tank. It is presumed that the cold temperatures have retarded the flow. One beach, originally thought to have been ‘oiled’ was later found to be covered with soybeans – the ship’s cargo. © Lloyd's Register - Fairplay Ltd 2004.

Different versions on Suez spill
CONFLICTING versions are emerging of the cause of an oil spill in the Suez Canal from the Kuwaiti flagged Al Samidoon. Kuwait Oil Tanker chairman Abdullah al-Roumi was quick to issue a statement through Kuwait's official news agency that the vessel had collided with a pier while under orders from an Egyptian pilot. But the chairman of the Suez Canal Authority, Admiral Ahmed Fadel, has since told reporters that the tanker did not strike anything. Fadel said only that the Al Samidoon had leaked through a fissure in its hull. Oil leaked from the tanker between Qantara and Port Said as it made a northbound transit through the canal on last night. Canal traffic has not been affected and workers are cleaning up the spill. Fadel said a committee will examine the cost of the incident. The holing of the Al Samidoon is the second major incident in the Suez Canal in a month. A Liberian-registered tanker, Tropic Brilliance, was stranded in the waterway in November blocking all traffic after it suffered a mechanical failure. © Lloyd's Register - Fairplay Ltd 2004.

EU members fail post-Erika measures
THE European Commission is taking eight member states to the European Court of Justice after they failed to implement EU legislation brought in after the Erika accident. The directive, formally adopted in 2002, provides for member states to monitor hazardous ships, intervene in accidents if necessary and create plans to accommodate vessel in distress in national waters. The legislation should have been adopted by member states on 5 February 2004. EC transport commissioner Jacques Barrot said: “Five years after the wreck of the Erika and three years after that of the Prestige, I am appalled that member states delay the implementation of key measures to improve maritime safety. Countries need to define places of refuge in case of emergency and ensure the installation of black boxes on all ships.” The member states who are being taken to the court are Belgium, Greece, France, Italy, the Netherlands, Austria, Finland, and the United Kingdom. © Lloyd's Register - Fairplay Ltd 2004.

Australia explains security zone
THE Australian government has moved swiftly to allay concerns in New Zealand, Indonesia and East Timor over its plan to establish a maritime security zone. For full story, see LR-Fairplay's maritime security website www.Sea-Sentinel.com. © Lloyd's Register - Fairplay Ltd 2004.

Petronas invited into Ennore LNG
INDIA has asked Petronas, the Malaysian oil company, to join Indian Oil Corp (IOC) in developing an LNG terminal at Ennore in India. Petroleum Minister, Mani Shankar Aiyar, made this proposal to the Malaysian PM Abdullah Ahmed Badawi and also suggested that Petronas partner IOC in the proposed South Pars gas field deal with Iran. To reciprocate, Aiyar said that IOC would like a stake in an oil exploration block in Sudan, currently controlled by Petronas. IOC’s proposed LNG terminal at Ennore is estimated to cost Rs2Bn and is projected to have an initial capacity of 2.5Mt tpa, to be expanded up to 5M tpa. It will handle LNG for the proposed 1850 MW power plant to be set up at Ennore. © Lloyd's Register - Fairplay Ltd 2004.

Westport aims to raise container productivity to 35 moves per hour in 2005 by Marc Lourdes
Westport is setting itself a goal of 35 moves per hour (mph) next year in the hope of further enhancing its container handling productivity. Its executive chairman Tan Sri G. Gnanalingam said Westport’s container productivity had increased from 20 moves per hour (mph) in 1994 to 30 mph in 2004. “Our break bulk productivity target is 300 tonnes per hour, dry bulk at 500 tonnes and liquid bulk at 3,000 tonnes per hour.” He said Westport had followed Singapore’s PSA International’s lead in prioritising the training and management of a highly skilled workforce above infrastructure and state-of-the-art equipment. “PSA rose to fame with 25 moves per hour. “Today Westport staff can do 30 mph and the Malaysian port industry is probably the first or the only industry which has given the Singaporeans a run for their money. “Our container volume has grown every year since our inception, from 20,000 boxes in 1996 to 2.6 million boxes today. “Our conventional volume has also grown and today it is at eight million tonnes,” he said, adding that Westport’s revenue this year would exceed RM500mil. Gnanalingam said that over the years Westport had demonstrated its prowess in increasing vessel productivity. “The last feat was 368 moves with six cranes, which is tantamount to 60 moves per hour. “Port Klang has grown from 1.5 million TEUs to 5.2 million TEUs with 65% of our volume in the transhipment business.” He said Westport’s success so far is due in a large part to the immense co-operation they had received from the various government agencies and private sector companies, saying the shift in the Customs mindset, which was proven when they agreed to work around the clock, was invaluable to Westport. “They (Customs) have changed their stance from guilty until proven innocent to innocent until proven otherwise,” he said. He also said that Westport had had tremendous assistance from the Immigration, Health, Agricultural and Fisheries Departments, all of which had helped Westport with documentation and faster online clearances. “We’ve also received excellent service from the Telcos, JBA and Tenaga Nasional,” said Gnanalingam, in his speech in conjunction with Westport's 10th anniversary celebrations last week. Another party, according to him, that was responsible for Westport’s achievements was its workforce. “When we look at the success of Westport, we think of the question - who built the Taj Mahal? “Usually the answer is ‘Shah Jehan built the Taj Mahal’, but the Taj Mahal would have remained a mere dream if not for the thousands of skilled artisans and workers. “We started with 20 staff in 1994 and today we have more than 2,000 staff. We are 100% Malaysian with 70% of the workforce being bumiputras.” He said 99% of Westport’s staff was new to the port industry, but with extensive training and development schemes, they had been transformed into a highly skilled and productive workforce with high performance standards. “We believe the people are an organisation’s asset and that only the best employers will get the best employees. “We have established ourselves as a regional hub facilitating world trade via Malaysian corridors and direct trade with our South-East Asian neighbours, thereby reducing third-party costs,” he said. © Star Publications (Malaysia) Bhd.

Buoyant freight rates come with risks, shippers warned
Increasing commodity prices and high charter rates may result in unexpected risks for the shipping industry, according to International Chamber of Commerce’s International Maritime Bureau (IMB). With the value of cargo and the price of freight both on the rise, the IMB is recommending that shippers take extra precautions to protect their financial interests. IMB director Captain Pottengal Mukundan said: “Market prices for high-demand resources such as coal and steel are high. “Some suppliers of these commodities have sought to avoid previously agreed commitments at lower prices. “In many cases, this has occurred after the chartering agreements have been concluded. “Clearly, this poses a problem for charterers who have fixed vessels to carry the cargo. They find themselves caught in the middle of disputes between buyers and sellers.” Capt Mukundan said these chartered vessels usually arrived at the load port to find that the shipper did not wish to load the cargo as originally contracted. The charterer thus finds himself subject of a substantial claim for deadfreight/demurrage. The situation can prove even more costly in cases involving short-term contracts of affreightment, where several vessels may have been fixed. In a recent case, two vessels fixed to load cargoes from China had to be diverted, at considerable cost, to load other shipments when the original shipper defaulted. The IMB advises owners and operators of chartered vessels to investigate the financial viability and track record of all parties involved in the sale contracts as well as the disponent owners and charterers of the vessels. Capt Mukundan said: “Given that freight rates are now an important component in the total cost of the delivered goods, looking closely at the financial viability of the whole venture before committing is critical.” In the current economic climate, he said, even a few days’ unexpected delay could be sufficient to change a profitable transaction - from the charterers’ view – to a loss-making one.” The IMB also noted that fuel consumption/speed claims under time charter parties were being closely monitored by charterers. With high daily charter rates, these claims become increasingly significant. Some major charterers have developed sophisticated software for monitoring these claims on a daily basis incorporating weather and voyage data from different sources. Capt Mukundan said buoyant freight rates were good for the shipping industry, but they came with risks. © Star Publications (Malaysia) Bhd.

IMB issues alert to banks on use of fake bills of lading
The International Chamber of Commerce’s International Maritime Bureau (IMB) is warning banks and shipping operators of a spate of cases involving the use of false bills of lading in the Arabian Gulf area and South-East Asia. Several recent cases involving fraudulent bills of lading point to a recurring problem with cargo aboard dhows and barges under tow in the Arabian Gulf area and South-East Asia. IMB assistant director Michael Howlett said: “The use of barges and dhows is a very common method of transport in both these regions and facilitates a significant volume of trade. He said these vessels tend to call at very small and remote ports, often consisting of no more than a jetty and a warehouse. “Recently, difficulties have arisen in verifying whether cargoes arriving at the ports have actually been unloaded.” Howlett said the IMB had discovered a number of instances where high value cargo, such as electrical goods and other finished products, had gone missing. These wares were said to have been loaded aboard dhows and barges in small ports in the United Arab Emirates. IMB investigators have uncovered bills of lading supporting this, but remain suspicious that the bills themselves are false. Verifying the authenticity of the bills has proven difficult, with many of the agents in these small ports being hard to identify and contact. Through its wide reach of contacts in these regions, the IMB has been able to establish that in a number of cases, the goods failed to arrive at specific ports. In some cases, the goods were never unloaded, even though the cargo was clearly booked onto the dhow or barge. IMB investigators are acting under the assumption that freight forwarders in the area are being coerced into issuing false bills of lading at the behest of their clients. Howlett said the IMB hoped to make banks in particular aware of this problem, as they were the most likely to bear losses in such cases. “We are urging financial institutions to take special care when providing documents for payment that involve a combination of high value cargo and small or unfamiliar ports. “Banks should take extra precautions, particularly if the freight is pre-paid.” Anyone uncertain of the nature of a port or the authenticity of bill of lading documents is encouraged to contact the IMB for assistance. © Star Publications (Malaysia) Bhd.

PM: Improve multimodal links
Improving national multimodal links and integration within its logistics network is the current challenge facing Malaysia in its capacity as a trading nation. “We need to ensure that our ports take a strong lead in regional redistribution as well as in Asia-Europe shipping,” said Prime Minister Datuk Seri Abdullah Ahmad Badawi. He said Malaysian ports in collaboration with the government should devise and direct strategies towards this end as globalisation had and would continue to directly amplify shipping volume across the world. “We must also collectively and meaningfully address issues pertaining to the safety, security and environmental quality of our seas,” said Abdullah at Westport’s 10th anniversary celebrations at Pulau Indah, Port Klang, last week. “In terms of our entire transportation and logistics network, the contemporary challenge that faces us as a trading nation is to ensure that we continue to improve our national multimodal linkages and integration. “All stakeholders involved have to work towards removing obstacles and inefficiencies and to ensure seamless and rapid transportation of goods and provision of services,” he said. Abdullah also said planning for the future of Malaysia’s role as a regional hub must be flexible and able to adapt to uncertainties as well as take advantage of opportunities beyond the horizon. “I believe that the country’s transportation and logistics industry should be broadly and comprehensively defined and therefore able to promote a wave of activities to augment the industry further. “This approach to the industry is indispensable if we are to increase our competitiveness, especially in light of the growth and expansion of China and India. “Malaysian port operators, as well as stakeholders across the transportation and logistics industry, have to work together to ensure that Malaysia increases its overall competitiveness,” he said. The Prime Minister added that the way forward needed to be charted with a broader overview of potential global future trends and the development of value-added complementary services. Abdullah said the prospects for Malaysian ports to be leaders in transportation and logistics and to serve as mega-transshipment hubs were quite apparent. He encouraged them to take advantage of this opportunity and release their full potential. Deputy Transport Minister Datuk Seri Tengku Azlan Ibni Sultan Abu Bakar, in his speech, said an efficient commercial transportation and seaport system was crucial to the growth and well-being of a nation’s economy. He said the capabilities of a port and its operations were crucial to the flow of commodities from inside and outside a country. “Westport is a good example as not only does it have modern infrastructure in the form of road and rail networks, but also other competent and efficient facilities capable of delivering world-class port services. “In 1980, Port Klang was the 57th busiest port in the world. With the aid of Westport’s contributions it has jumped to 12th spot today.” Tengku Azlan also hailed Westport’s policy of prioritising its employees’ welfare and safety in the workplace. “The implementation and adherence to the International Ship and Port Facility Security (ISPS) and the National Institute of Occupational Safety and Health (NIOSH) codes among others reflects the port's pro-active attitude in the safety and security aspects of its business. “Westport has also introduced a Container Gate Security system and the latest ICT applications in the overall management of the port to ensure and fulfil the needs and wants of its customers more efficiently.” He said the continuation of these kinds of endeavours towards a virtual and paperless management environment would serve to make Westport even more successful in the future. Tengku Azlan expressed his hopes that Westport’s success story would serve as an encouragement for more main line operators (MLO) and local shipping companies to use it as their cargo loading and transhipment hub. © Star Publications (Malaysia) Bhd.

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