• 2016 March 25

    Better a state fish than an empty dish

    Russia’s fishing fleet is rapidly deteriorating. Yet, most private companies cannot afford having new vessels built at domestic shipyards on their own resources alone. Therefore, there is a plan to develop a state programme to support construction of new fishing ships at Russian shipyards which see a reduction of construction costs amid the rouble’s decline.

    Additional quotas

    As Peotr Savchuk, Deputy Head of Russian Federal Fisheries Agency (RFFA, Rosrybolovstvo) said at the International Forum on Shipbuilding and Safe Shipping “Fishing Fleet – New Impulse to Development” in Murmansk, Russia’s fishing fleet is generally in a satisfactory condition. According to him, average age of vessels in the Far East is 28-30 y.o., in the Northern Basin - 25-27 y.o. This speaks to the fact of physical and technological inferiority of Russian fishing fleet, hence the necessity to implement a large scale programme on construction of fishing and fish-freezing ships.

    Here, like in other sectors, ship owners face the problems of high loan rates, absence of long-term money, high construction costs at domestic shipyards. So, state support is crucial in this field.

    By today, a decision has been made on allocation of additional fishing quotas for companies ordering vessels in Russia (up to 20% of quotas for investment purposes). Russia’s Agricultural Ministry and bill providing for introduction of special measures from 2019. Those measures are to improve the procedure of quotas distribution and efficiency of their usage. The draft law also provides for granting additional quotas to companies placing their orders with domestic shipyards. 

    Yet, Ilya Shestakov, Head of Russian Federal Fisheries Agency, said at the Forum, that the demand exceeds the capacity of Russian shipyards which can lead to shipbuilders’ dictate against the fishing companies’ interests. According to Rosrybolovstvo, fishing companies of the Russian Federation require 364 newbuildings including 91 large capacity ships. “Our shipbuilding industry cannot meet such an order”, said Ilya Shestakov. Estimated payback period of a vessel built under the state support programme will make about 12 years.

    Shipbuilders’ goldfish

    When speaking about the capacity of domestic shipbuilding, it should be emphasized that new state-of-the-art fishing ships are being designed in Russia today.

    Krylov State Research Center (KSRC) has developed a concept design of a unique scientific research ship for Russian Federal Fisheries Agency. Aleksandr Salnikov, Deputy Head and Advanced Design Manager at Baltsudoproekt Central Design Bureau (KSRC), says this ship has no equals anywhere in the world with its ice class Arc4, noise level complying with ICES-209 recommendations, LOA of 84 m, breadth of 16.5 m, draught of 7.2 m, maximum speed of about 15 knots and 11 knots in low-noise mode.

    To design this ship KSRC specialists applied unique design technologies, in particular, ship’s vibroacoustic model allowing the equipment to be arranged in the optimum way, as well as hull shape optimization based on operating conditions of propulsion units and sonar.

    The working group on designing of the ship consists of representatives of Russian Federal Fisheries Agency, Ministry of Industry and Trade, United Shipbuilding Corporation, shipbuilding and designing organizations. KSRC is currently busy with making the design comply with specifications set forth by the working group. This year is to see the development of project documentation while the construction is to begin in 2017. The ship can be built by Vyborg Shipyard, Admiralteiskie Verfi, Yantar or Pella shipyards.

    Peotr Savchuk also told the Forum about designing of a new refrigerator ship. Besides, there is a number of new projects for trawlers of different types.

    Representatives of Russian shipyard says that construction costs at domestic shipyards have decreased up to 1.5 times amid rouble devaluation as prices are nominated in foreign currency. In this context Russian goods get more competitive. According to Aleksandr Solovyov, Director General of Vyborg Shipyard, construction costs at his shipyard have decreased by about 20%, Okskaya Shipyard representative mark the decrease of up to 1.5 times.

    Meanwhile, the problem is in the lack of serial construction, hence the higher cost of construction. It takes Vyborg Shipyard 28 months to build a lead ship for a fishing fleet under a ‘turn-key’ principle and it takes some 8 months to build a serial ship.

    Aleksandr Solovyov says the situation is complicated with a high load of Russian shipyards under the state defence procurement programme, which is a priority for them. Moreover, shipyards focusing on military contracts are less suitable for civil shipbuilding, he believes.

    When speaking about the prices, Yevgeny Zagorodny, USC Vice-President for Civil Shipbuilding, said that preparatory and design works account for 8% of total trawler costs, financial obligations (insurance, interest rates) – for 7%, construction services (shipyard’s revenue excluding costs) – for 15%,  materials and equipment – for 70% (50% - imports). So, 2/3 of trawler costs are determined by a designer which decides on the use of certain equipment and materials in compliance with customer’s specifications. According to the worldwide practice, selection of certain projects is based on a benefit to investment ratio (throughout the vessel’s entire life cycle) rather than on production costs.

    According to Yevgeny Zagorodny, USC is able to build fishing ships with any outfitting and for any area of navigation. Leasing programmes are offered for up to 10 years at 2/3 of the RF CB refinancing interest rate, as well as ‘rate holiday’ for the construction period.

    Among USC shipyards well prepared for such orders Yevgeny Zagorodny mentioned Yantar Shipyard (2 large fishing ships and 3-4 mid-sizes ships per year), Vyborg Shipyard (2 large and 3-4 mid-sizes ships per year), Khabarovsk Shipyard (3-4 mid-sizes or small-size ships per year), Lotus Shipyard (3-4 or mid-size or small-size ships per year), Zvezdocjka (3-4 mid-sizes or small-size ships per year), Arctech Helsinki Shipyard (Finland, 2 large fishing ships in cooperation with Vyborg Shipyard).

    Within the framework of the Forum, Vyborg Shipyard signed contracts with Arkhangelsk Trawl Fleet for construction of four trawlers.

    To stay afloat

    The Federal Fisheries Agency  is concerned about the situation with recent years’ disasters involving fishing ships and resulting in the loss of lives and fleet units. Though 5-year incidents statistics shows general reduction in the number of cases by about 40%, there were regular cases with the large- and average-size vessels resulting in the death or loss of two or more persons.

    The official believes that many of them could be prevented through proper risk-management. Human factor is still the main cause of accidents. 

    According to Peotr Savchuk, state authorities are set to undertake severe sanctions against companies neglecting safety standards. Among the most frequent violations the official named going beyond the assigned area of navigation, excess weight, stability violation, lack of crew members’ expertise and risk detection, violation of safety policy, negligence and lack of qualifications.

    To improve training of fishing ships’ crews educational institutions of Rosrybolovstvo are to be equipped with state-of-the-art emergency simulators.

    Konstantin Palnikov, Director General of the Russian Maritime Register of Shipping (RS), in his turn, drew the attention to the problem of unauthorized alteration of fishing ships’ structure and equipment. Within the framework of the campaign on occasional survey of fishing ships initiated by the Federal Agency for Transport Supervision, Russian Maritime Register of Shipping revealed 12 vessels with unauthorized alteration of ships’ hulls and installation of new equipment.  As of the beginning of March 2016, the survey covered 305 vessels. According to Konstantin Palnikov, 2015 saw 52 accidents with fishing ships.  Major cause of the cases was the human factor. 

    “Responsibility is not only on the crew but also on a ship owner which should select crewmembers and train them so that all the actions of the crew are practiced until they become automatic,” RS head said.

    To summarize, it should be acknowledged that ruble devaluation has come at the right moment for the fishing industry which is badly in need of new and technologically advanced ships. Russian design bureaus and shipyards have the required competence but state support is needed here. Yet, the government and the business should put much effort on developing an efficient system for safe operation of the fishing fleet.

    Vitaly Chernov