Some fishing companies consider cancellation of their contracts with Russian shipyards
Delivery delays are from half a year to a couple of years
Many of fishing ships being built by Russian shipyards under information quota programme will be delivered with a delay from half a year to a couple of years, representatives of shipbuilding companies said at the meeting held by Rosrybolovstvo (Russian Federal Fisheries Agency). According to Russian Association of Fishery Companies, Entrepreneurs and Exporters (RAFCEE), detailed information about problems of fishing ships construction in Russia and suggestions on addressing them will be submitted to RF Government. The meeting was not attended by any representatives of the Ministry of Industry and Trade.
By 2022, the investment quota programme is to cover the construction of 43 fishing ships by Russian shipyards basing in the application campaign. Only two ships have been built so far. The construction of 27 hulls laid down in 2017 – 2018 is far behind the schedule. Keel-laying of 16 more ships slated for 2021 is not likely to meet the schedule. However, fishing companies perform their contractual obligations on construction financing.
Non-compliance with deadlines should be attributed to circumstances which are beyond the investors' control. According to representatives of shipyards, the delivery of all ships will be delayed, from half a year to a couple of years. For example, Vyborg Shipyard (Saint-Petersburg) is building four fishing ships for Arkhangelsk Trawl Fleet JSC but pre-commissioning activities for the lead ship are delayed due to the coronavirus epidemic. The shipyard is also building three vessels for FOR-Group with the delay expected to reach up to a year and a half.
Pella shipyard (Saint-Petersburg) is in a more difficult situation with a contract execution delay of two years. All in all the shipyard is to build six fishing ships. One of the customers, Murmanseld-2, is looking into the contract cancellation.
NOREBO is to have its vessels built by Severnaya Verf shipyard (Saint-Petersburg) with the delivery of the first one initially scheduled for January 2020 and now postponed till August 2020. The shipyard expects to start working according to the schedule in two years. It is also building ships for Fishing Company “Virma” and Globus. None of them meet the deadlines.
The order portfolio of Russian Fishery Company at Admiralteiskie Verfi shipyard numbers ten units with lead one scheduled for delivery in spring 2021. Yet, it can be delayed by 4-6 months.
Kaliningrad Region based Yantar shipyard cannot deliver the ship built for Fishing Collective Farm named after V. Lenin because foreign specialists cannot come for sea trials.
The meeting participants have named three major problems causing the disruption of construction deadlines. First of all, it is the shipyards financial situation: they often have to cover expenses for construction of some ships by advance payments for other orders.
Secondly, it is shortage of personnel. According to Igor Shakalo, Director of USC’s Civil Shipbuilding Department, it should be attributed to a great extent to initially tight time limits and distribution of many orders among few shipyards.
Besides, imports of ship components have been delayed due to the pandemic with some cases of foreign subcotractors’ refusal to continue cooperation. Amid closed international traffic, some technological operations requiring participation of foreign specialists (sea trials, pre-commissioning activities) are disrupted.
RAFCEE President German Zverev told about the work of the Government Coordination Council to control the incidence of the novel coronavirus infection in the Russian Federation chaired by Prime Minister Mikhail Mishustin towards solving the issue of providing visas and permits to foreign specialists.
Deputy head of Rosrybolovstvo Peotr Savchuk said that the Agency would analyze the situation and submit the findings to the Government. According to him, investors bear considerable losses due to servicing of bank guarantees and construction. Besides, additional losses will be caused with no quotas granted in proper time.
“Fishing companies strictly meet their financing schedules. Interest rates for raised loans and servicing of bank guarantees totaled at least RUB 10 – 12 billion in 2017 – 2019 with the ships have not been built yet. Strange indifference of the Ministry of Industry and Trade is amazing after it was advocating in 2015 – 2016 the readiness of the industry under its authority to build dozens of fishing ships in five years with only two built by today. Taking into consideration enormous financial load on the companies I see it necessary to hold on the increase of tax burden on the fishery industry”, emphasized German Zverev.
