26 March 2017

Could two more navy vessels be heading our way?


LIVERPOOL - The federal government has issued two new public tenders for the ship breaking and disposal of former navy ships – and these ones are close by.

The former HMCS Preserver and the CFAV Quest are located in the Halifax dockyard.

R.J. MacIsaac Ltd. of Antigonish has set up a shipbreaking yard in Liverpool.

So far, the company has been awarded the tenders for the last three naval vessels to be recycled.

The former Protecteur, Iroquois, and Algonquin  were taken to Liverpool from British Columbia as part of a contract worth about $50 million.

According the federal government’s tender document, the Department of National Defence has a requirement dispose of the former HMCS Preserver, a Protecteur-class auxiliary oil replenishment ship, and the former CFAV QUEST, an Auxiliary General Oceanographic Research/Oceanographic Research Ship.

The contractor will be required to prepare the ships for transfer, transfer each to the approved sites, demilitarize the controlled goods, return any museum material, and subsequently dismantle, dispose and recycle the vessels.

The tender will close on April 26.

According to the document, work must be completed on both vessels within 18 months of the contract being awarded. 

R.J. MacIsaac has not commented  on whether it plans to bid on the vessels.

Source: the advance. 25 March 2017

20 March 2017

Navy can’t even give away two old ships because it would cost too much to remove hazardous materials

HMCS Algonquin sits in port with significant damage to her port side hangar at CFB Esquimalt, B.C. on September 1, 2013 following a collision with the HMCS Protecteur. She's now one of four retired veteran ships.

The Royal Canadian Navy considered giving a destroyer and supply ship to another nation instead of scrapping them, but had to nix the idea when it realized how costly it would be to remove hazardous materials from the vessels.

HMCS Protecteur and HMCS Algonquin, both decommissioned in 2015, were considered for donation, according to documents obtained by the Ottawa Citizen. But to move ahead with that plan would have required that the government spend more than $10 million on each vessel to remove all polychlorinated biphenyls, or PCBs.

Instead of spending the $20 million, the decision was made to send the vessels to the scrap heap.

Public Services and Procurement Canada has just put out a new request for bids for the disposal of the former HMCS Preserver, a supply ship, and the former CFAV Quest, a research ship used by the Department of National Defence. Those bids are required by April 26.

But the 2015 disposal documents prepared for HMCS Protecteur and HMCS Algonquin outline the limitations of what can be done with surplus navy vessels.


The Royal Canadian Navy considered either giving HMCS Algonquin to another nation or donating it to a museum or similar outlet. “A gratuitous transfer to another nation was considered and deemed not to be a viable option due to numerous hazardous materials embedded through the ship, such as polychlorinated biphenyls,” said the navy planning records, obtained by the Citizen through the Access to Information law.

PCBs were in HMCS Algonquin’s cabling and insulation. Because of international rules on PCBs, the material would have to be removed from the vessel before it could be transferred to another nation, according to the navy.

“(The ship’s) only value is for recycling of her metal,” the navy documents stated, adding that the government would receive $400,000 to $600,000 for the scrap metal.

HMCS Protecteur, commissioned in 1969 and damaged by a major fire in 2014, also had PCBs on board and faced similar issues.

The Navy also decided against donating the ships to non-profit groups or museums. That was deemed to be “the most risky and costly option” to the federal government since not only did the military have to remove hazardous materials but would still have a degree of responsibility over the vessels.

“If (Protecteur) is to be displayed alongside a given jetty and poor maintenance results in the ship sinking, the Navy will likely have to assist financially or physically in the recovery of the ship,” the navy warned.

The disposal documents also pointed to past problems. HMCS Fraser was transferred to a private organization in 1998 but legal and other issues forced the navy to buy the ship back. It was eventually dismantled in 2011.

During the disposal of the former HMCS Annapolis, the navy had to pay $1 million to remove PCBs. It was then sold for $20,000 and was used as an artificial reef, according to the navy documents.

The submarine Onondaga was transferred to a museum but, after the boat rolled on its side, the navy had to send a team of experts to deal with the problem. During that 2008 operation, a navy diver narrowly escaped being crushed, the documents point out.

Source: national post. 19 March 2017

Russia will subside ship recycling and boost shipbuilding

Russia will subside the ship recycling to recover part of the cost of acquiring or building new merchant vessels. For the current year, the government will allocate 400 million rubles and the measure will last until 2030. The Russian Ministry of Industry and Trade plans to consolidate the requirements for the priority placement of orders for the construction of ships at domestic shipyards, which will boost the local sector and expected to start benefiting the economy from 2020, as the measure is good only with the full technical modernization of domestic enterprises and need technical period for modernization of the yards.

“The Ministry of Industry and Trade has developed a ship recycling grant in the form of subsidies to organizations to recover part of the cost of acquiring or building new merchant vessels in exchange for ships that have been scrapped. This year, the planned subsidy is 400 million rubles. Financing of the ship recycling grant will last until 2030”, said the Russian Industry and Trade Minister, Denis Manturov.

The Russian government also plans to boost shipping industry in the country, as the coastal transportation within Russian territorial waters should be carried out only under the Russian flag vessel and ships built at Russian shipyards.

Source: maritime herald. 19 March 2017

Ship for scrap triggers green concerns

Officials say all statutory environmental rules, directives will be complied with

Every time a ship for scrap reaches the Steel Industries Kerala Ltd. (SILK) unit at Azhikkal here, there are apprehensions about environmental pollution.

And it is not likely to be any different this time when a 1,300-tonne cargo ship has been brought to the public sector vessel dismantling unit located on the bank of the Valapattanam river, if the concerns aired in a section of the media are any indication.

The cargo vessel from Male reached the SILK unit here recently for dismantling.

SILK officials have said all statutory environmental rules and directives will be complied with before the work for dismantling the vessel starts.

They said that this was the first vessel brought at the unit for breaking after completion of the ship-breaking activities amid protests by an action committee of local residents and environmental activists a few years ago. They had then demanded its closure saying that the ship-for-scrap work causes environmental and health hazards.

When contacted, SILK Managing Director J. Chandrabose told The Hindu over the phone that all statutory rules and directives from the Pollution Control Board will be complied with before the breaking starts. The dismantling work will be done in the workshop of the unit with roofing and concrete floor as required under the rules, he said adding that concrete flooring ensures that not a single drop of oil or grease from the ship reaches the waters.

The Azhikkal unit of SILK had been started for building boats as well as breaking vessels for generating steel required for recycling.

The public sector company is said to be running on accumulated loss, though the Azhikkal unit is surviving with orders for ship for scrap.

The latest order for dismantling coincides with the attempts to secure an order from the Kerala State Water Transport Corporation for building passenger boats. The SILK officials confided that the order is now at the stage of tendering.

The unit can stay afloat if it gets three or four vessels for dismantling every year, they said. Ship breaking is also for reuse of iron used in ships, they added.

All licences

N. Mohammed, senior manager of the SILK, said the unit has all the licences from the Pollution Control Board and the local panchayat for carrying out its operations.

Source: the hindu. 17 March 2017

Please, Get Real with Ship Recycling

Last week five European ship recycling yards announced that they signed an agreement that establishes the European Ship Recyclers Group (ESR). In its statement ESR said: “Our first target is to create awareness of the recycling capacity in Europe which today is over a million ton. We have to ensure that our member yards are on the top of the ship-owners’ list for dismantling their ships. Our message is a clear one. If we can handle them let’s keep the E.U. flagged ships in Europe.”

Furthermore, the Group says that it aims to speak with one voice to the European Commission, which is responsible for the implementation of the new E.U. Ship Recycling Regulation, and to unite all European recycling.

The day following the establishment of ESR, the NGO Shipbreaking Platform issued an announcement: (1) welcoming this initiative; (2) alleging that ship owners are rejecting European recyclers under the false pretext that there is no recycling capacity in Europe; (3) reaffirming ESR’s claim that the European Union yards have a combined capacity of 1.1 million LDT; (4) stating that almost all European yards had said to the Platform that, if they would be promised an increased market share of the commercially owned vessels, they would invest to enlarge their facilities; and (5) calling for European legislation to oblige all ships visiting European ports to pay a Ship Recycling Licence to finance the closing of the price gap with South Asia.

It is understandable that European ship recyclers wish to maximize any opportunity that the European Ship Recycling Regulation may offer them. However, I think that the new organisation is getting carried away with its own marketing and the views of the Platform.

The starting point for understanding the market for the recycling of commercial ships is to study the scrap steel market. The European Union has been the largest net exporter of scrap steel in the world, having overtaken the U.S., which is currently the second largest net exporter.

Seen in this light, the idea of recycling ships for their steel in Europe (or in the U.S.), in order to export ferrous scrap to Turkey1 (which is the destination of 58.8 percent of E.U.’s scrap steel exports in 2015), to India (10.4 percent of E.U.’s exports) and to Pakistan (7.2 percent) is plainly absurd and not worth serious consideration. Nevertheless, this is exactly what the ESR and the NGO are saying in their public statements.

Each of the 18 European recycling yards that applied and that have already been included in the European List of approved yards, had to declare in their applications the maximum annual tonnage they have recycled in the last decade. This is what is termed as the ship recycling capacity by the European Regulation, as well as by Hong Kong Convention.

Naturally, this metric results in an overestimate of true current capacity as, for some of the yards their maximum annual tonnage may reflect capacity of a few years ago that is no longer there. In fact, amongst the 18 E.U. yards currently appearing in the European List there are yards that are not currently recycling ships. In any case, the self declared maximum annual capacity of the 18 European yards is 303,065 LDT2, and definitely not the wishful figure of 1.1 million LDT that is claimed by ESR and the NGO.

We have to assume that the people who run the European ship recycling yards must be capable businessmen. How then can they keep a straight face when saying they have to ensure that their member yards are on the top of the shipowners’ list for dismantling their ships? Even forgetting Chinese and South Asian yards, why on earth should any owner of an ocean-going ship not sell his ship to a Turkish recycling yard for multiples of the price offered by E.U. yards?

The European ship recycling yards are not, and will not be the destination for end of life ocean-going commercial ships. Instead, the real market for European ship recyclers is made up of: E.U. government ships; ships that are immobilised in E.U. ports because of damage; and, primarily, the plethora of smaller European based ships and boats for which repositioning to South Asia, China and even Turkey would be impractical and economically prohibitive.

To get a feel of the magnitude of the small ship market we may examine the size distribution of the world fleet3. At the end of December 2015 there were 111,806 ships over 100 Gross Tons in the world. If we make the reasonable assumption that ships below 3,000 GT are not likely to travel a great distance to a recycling yard, this means that 75,998 ships between 100 GT and 2,999 GT, or 68 percent of the world fleet’s ships, will be recycled in local yards.

A similar proportion of the fleet trading in European waters should also be expected to be recycled in European yards. To these ships one should add the vast number of boats below 100 GT. This is the natural market for European ship recyclers, and it would appear wiser for ESR to concentrate on these ships rather than support the unreal propositions of the Platform.

Dr Nikos Mikelis is non-executive director of cash buyer GMS.

1 “World Steel Recycling in Figures 2011-2015” Bureau of International Recycling, Ferrous Division.

2 ec.europa.eu/environment/waste/ships/list.htm

3 “World Fleet Statistics 2015”, IHS Maritime & Trade 2016

Source: maritime-executive. 15 March 2017