Greek Shipping News Cuts
Week 16 - 2004


Hopes rise for tanker 'hostages' held in Pakistan

Source:, By Brendan Malkin in London, Published: April 16 2004 5:00 | Last Updated: April 16 2004 5:00

Detained crew of Tasman Spirit to be allowed to go home
---KARACHI: All is set for grant of permission to the crew of Tasman Spirit to leave Pakistan for their home country by coming Monday, sources disclosed to The News.
A six-member high-level committee, constituted by the federal minister for communications, Babar Ghauri, at the request of European Union, Human Rights Commission, and Greek foreign minister to sort out the issue has recommended that the seven members of the crew and its Salvage Master be allowed to leave the country while the case be proceeded against with in their absence. They would, however, be bound to attend the court on the day it announces its verdict in this case.
The ministry concerned has instructed the prosecutor of the case, pending before Judicial Magistrate Mumtaz Solangi, not to oppose the application in which the accused have sought exemption from personal appearance. The application will be taken up by the trial court on Saturday.
According to the understanding between Pakistani and Greek governments, after disposal of this application the counsel for the accused will move another application fro return of the passports and other travelling documents of Salvage Master Nicholas Papas, Master Captain Kruvstinoes Dimitvios, Chief Officer Meimetis Georgian, IIIrd Officer Jomero Joel, Chief Engineer Valsamos Dionisios, IInd Engineer Monongsong Roberto, IIIrd Engineeer Koulosos Georgios and Quarter Master Floras Greg.
Under the instructions this application would also be assented to by the prosecutor and thus all legal formalities would be completed before their departure probably on Monday.
The accused are charged under Section 431, 285 and 280 of Pakistan Penal Cod, 89 and 90 of Karachi Port Trust Act and 556 of Maritime Security Act in the case number 2458/2003 arising out of FIR 25/2003 lodged at the PS Docks on the complainant of captain Iftikhar Ahmed of KPT on September 4, 2003. All of them are on bail and are staying in separate rooms at the Pearl-Continental, Karachi.
The sources said a high-level committee, headed by MNA Dr Farooque Sattar has recommended that all the crew members and Salvage Master be allowed to proceed to Greece and the case, which is still at pre-final charge sheet stage, should be proceeded with in their absence till its final outcome.
The move, the sources said, is probably aimed at winning more support in the European Union's influential Foreign Affairs Committee. The members of the committee have been antagonistic towards Pakistan for the "country's human rights record" and the political situation, the sources added. "They say that Pakistan has unnecessarily turned a purely commercial matter into a criminal case and has detained the crew, which is a violation of human rights. Now we will dispel the impression that human rights conditions here are bad" said a source in the federal ministry.
MT Tasman Spirit had sailed from Iran on July 26, 2003, with 67,000 metric tons of crude oil for Pakistan Refinery, Limited. It entered Pakistan territory the following day when it was a public holiday. It started entering into channel B of Karachi port under the supervision of KPT captain Nasir Javed. Under the KPT law every captain is bound to bring his ship into the channel under the instructions of KPT captain. It was rough weather on that day and KPT captain instructed the accused Kruvstinoes Dimitvios, Captain of MT Tasman Spirit to increase speed of his ship to avert mishap. The captain and other crew members, however, disregarded his instructions and due to this negligence and non-compliance of instructions of KPT's captain the front portion of the ship was stuck up in the sand. The tragedy caused loss of oil worth billions of rupees, damage to ship and sea life, sufferings to citizen living in the port city.
The prosecutor of the case, Syed Mehmood Alam Rizvi, has already given opinion that the evidence is only against the salvage master and the captain while there is no evidence against the rest of the crew members. The government, after considering his opinion, has
decided to allow all the eight accused go home.
The sources said after departure of the accused, the case against them would continue to be proceeded with. As far the damages caused by the disaster, P&I Club is meeting on April 27 next in London to settle all the issues regarding insurance and compensations etc.
Source:, by Akhgar Anwar Awan, Friday April 16, 2004-- Safar 25, 1425 A.H.

30-year age limit will strip ferry fleet of 182 ships
---The need to replace almost 200 Greek ferries reaching 30 years of age between now and 2010 could provide huge opportunities for the country's shipyards. The enforced withdrawal could also lead to a shortage of vessels to serve routes in the domestic network, while opening the way for outside competition.
These are conclusions of a Marine ministry (YEN) study on the impact of the withdrawal of ships from the ferry network over the next six years. Indeed, though the new government has given no indication it intends easing the 30-year upper age limit, the Marine ministry expresses concern that many of the ships withdrawn will not be replaced, causing problems within the network.
The study reveals that today some 365 vessels of all types operate in the network, 90 of them ro-ropax ships. Average age of the traditional ferry is now 19.4 years and between 2004 and 2010 the ministry says 55.5% of vessels will be forced into retirement. These will comprise 50 of the closed type, 25 passenger ships, 72 of the open landing craft type and 35 hydrofoils.
Replacement of the open-type ferries could especially be big business for the local ship yards. All but a handful of this type, which is so vital for the shorter trips, were built in Greece though few have been built in recent years.
The ministry study concludes that intense competition on the Greece/Italy routes will lead to more newbuildings in the Adriatic which will result in ships being transferred into the domestic services. In addition, completion of the Rio/Antirio bridge linking the north western Peloponnese with the mainland, will also release vessels for other services.
However, the study notes that once the legal framework stabilises, Greece's liberalized marketplace will likely prove attractive to foreign vessels, introducing a new dimension to existing competition.
Source: www.ekathimerini, 16 Apr 04

Greek-owned ships are fewer but larger; total capacity rising
---Greek-owned shipping remains a leading global force, numbering 3,370 vessels with a total capacity of 180 million deadweight tons (dwt) - or 109 million gross tonnage (GT) - according to figures of the London-based Greek Shipping Cooperation Committee. This year, there have been 15 additions, increasing capacity by 8.5 million dwt (4.98 percent) - or gross tonnage by 5.1 million (4.93 percent).
Most of this increase came under the Greek flag, which represents just a fraction of Greek-owned shipping. The capacity of Greek-flagged shipping rose by 5.6 million dwt, or 2.5 million GT, although the number of vessels decreased by 24 to 905 from last year. Total capacity now stands at 62 million dwt.
Shipping agents take the view that the government ought to take this decrease in numbers seriously and urgently adopt measures for boosting the competitiveness of the national shipping register, with a view to attracting more vessels and creating jobs for Greek seamen, particularly officers.
In the last joint session of the boards of the Union of Greek Shipowners (EEE) and the London-based Committee, there was particular emphasis on the need to strengthen the competitiveness of Greek-flagged shipping, improve training and for strong government support of the shipping industry's positions in international forums.
Despite the strongly competitive conditions prevailing in global shipping, Greek owners currently have on order 256 new vessels of various categories and types, totaling a capacity of 13.7 million GT.
The number of Greek-owned shipping vessels has declined since 2000 but capacity has been on the rise in terms of both dwt and GT. In March 2000, Greek-owned vessels numbered 3,584, totaling a capacity of 150.9 million dwt and 90.2 million GT; in March 2001, the number had risen to 3,618, with a total capacity of 168.4 million dwt and 100.2 million GT. In March 2002, it numbered 3,480 vessels, totaling a capacity of 164.6 million dwt and 98.2 million GT. The number had fallen further by this time last year to 3,355, but capacity had risen to 171.6 million dwt and 103.8 million GT.
Greek-owned shipping comes under 50 different flags other than the Greek; 603 are Maltese-flagged with a capacity of 30.7 million dwt, 544 bear the Panamanian standard with a total capacity of 23.3 million dwt and 502 are Cypriot-flagged, with a capacity of 23 million dwt.
Source:, by Nikos Bardounias - Kathimerini, Thursday April 15, 2004

Booming Market - but is it all good for shipping financiers?
---In Greece, the pre-dominant legal structure is the single purpose shipping company which owns a single ship. Any recourse is to the owner if a personal guarantee is given. Otherwise the only recourse is to the assets - essentially the ship itself - of the borrowing entity. An owner may have a number of vessels all owned by separate Single Purpose Shipowning Companies but all managed by the same management company.
The Greek shipowner with a couple of vessels must be quite happy at the moment. His ships are generating a lot of cash. But what to do next? Does he sell and cash out? Does he trade through the great freight market with the risk that, when the boom market ends, the overage vessel drops dramatically in value? Does he look to pick up another vessel or two now that cash flow is abundant? With today's great cash flow projections - are the banks there to help the smaller owner grow?
It is probable that - save for one or two lenders to the cruise industry - shipping portfolios of most banks are looking pretty good. But the banks also face a huge dilemma. Should they continue to lend into this extravagant market where the only salvation on new money lent is the performance If a charterer contracting to pay enormous charter hire over the next 12-24 months?
Most commentators express a fair degree of confidence that China will keep the market buoyant at least for this year, most likely the next as well. Some say until the Beijing Olympics in 2008. What is certain though is that today's market will not last forever. At some point it will normalize - not to disaster levels - but just a return to Panamax bulk carriers earning $10,000 to $12,000 daily and handymax bulkers earning a bit below $10,000. Let's face it: after the recent market, normal will never be the same again.
So is lending safe? What does a shipping banker really think when assessing a transaction? Consider a cape size vessel bought for $20 million with a two year charter at $25,000 daily. 75% finance sounds like a good deal with a charter like that. But, wait a minute, the vessel is built 1984 not 1994. That means that it's 20 years old. What happens if the charterer doesn't perform?What happens if the market crashes? What happens if my loan of $15 million ends up being secured by a 20-year vessel at a multiple of scrap?
The truth is that any deal financed today involving dry bulk carriers is dependent on a very high time charter over the next 12-24 months. Some owners with the luxury of existing large fleets and who can offer corporate guarantees may be financed without the comfort of the time charter. But smaller owners with only a couple of vessels will need a charter, and any prudent bank will take the full benefit of the higher charter to reduce the loan to "normal" levels during the charter period. The question, though, is: will banks lend even on this basis to the smaller owner?
At a historical $20 million for a newbuild panamax bulker, breakeven covering operating expenses, financing and a 10% return on equity is about $11,500 daily over 20 years. At $40 million, that breakeven jumps to $16,000 over 20 years. Historically, this is unachievable; even the $11,500 has proven elusive for long stretches. Translate this to an already 10-yearold panamax on the market at $25 million. It is clear that today's is an abnormal market and great caution must be taken.
If a small bank has a lending budget of $200 million, what should it do? That might only be 10 ships in today's market. Portfolio diversification may be a challenge. Compound this further with low margins and not much ancillary business. In the good old 80's and early 90's, lending of $200 million would have financed some 30 vessels, each bringing with it an allotment of international payments, crew wages, guarantees and so on. If $200 million only finances 10 ships in today's market, and if top owners demanding low margins own these 10 ships, then the profitability of the bank will be low.
So it's higher margins we want. Let's increase the risk and finance a smaller owner. A small owner with only two existing vessels who is completely reliant on the performance of the charterer over the next couple of years is a different risk altogether for the bank. If this vessel turns into a bad investment, the other two vessels may not be able to compensate. Are smaller owners even more out of the lending criteria? It appears so.
Name Lending. In times when the market is poor and bargains are to be had in asset values, banks take comfort in owners with deep pockets or with large fleets. The deep pockets can be accessed if necessary to subsidize loan repayments. The cash flow from the other fleet vessels can be used to pay any deficit on the vessel being financed. The smaller owner, on the other hand, does not normally have such cash availability and only has a couple of other vessels. Not only this, but the smaller owner is most likely interested in acquiring older vessels which, in a market downturn, are deemed higher risk.
But when the market is booming and cash flow is great and the existing 20-year-old vessels are making piles of cash, shouldn't the smaller owner feel that the time has come to get some decent finance from a bank? Well, not really. In today's market, where does the bank get it's comfort? Well, believe it or not, it is once again from the owner with deep pockets or with a large existing fleet. So whether it is a good market or a bad market, it seems like name lending is name of the game.
But does the owner really want to buy in this market? Well, the irony is that the smaller owners wants to buy in all markets and the bigger owner can take the luxury of selling when he sees a fat profit.
I heard a story recently about an owner with a sizeable fleet putting a 20-yearold cape size on the market. He tested the market at $15 million before Christmas, and got an immediate response at $14 million. He increased his expectations to $20 million and received a counter at $18 million. After Christmas he tested again at $25 million and got an offer at $24 million. Finally, he told his broker he wanted $30 million. He was offered $28 million and he did not sell. Rather, he felt he could charter for a couple of years at excess $40,000 daily.
Was this the right decision? Who knows what the market will bring and, if he does trade for two years at $40,000 daily, the vessel will earn him a net $24 million after OPEX. But shipping is a risky business, and what is sure is that this market will fall and, when it does, that 20-year-old cape size will be worth not a long way from scrap value. If one assumes that the vessel had debt of $5 million, then a sale at $28 million would have left $23 million for further investment. But where to invest? Well, with newbuild panamaxes with delivery 2007 available at $27.5 million, the profit from the old cape could provide equity of 30% for three newbuild orders. Not a bad exchange, bearing in mind that this excess profit essentially appeared out of nowhere.
Consider the above example if the owner in question had only two or three vessels. Does he sell, knowing that he will not be able to replace? Or does he trade? It is my opinion that the prudent shipowner should take the current market conditions to cut their debt levels and to build up cash. It is excess debt and not bad market conditions which cause shipowners problems in a poor market. Vessels can always cover their operating expenses. What they cannot always cover is the debt service. With earnings never before seen coming in to the operating account of shipowners, now is the opportunity to channel some of this excess cash into reducing debt levels.
And what about cashing out? Well, why not? The small owner would do well today to cash out. What is wrong, after all, about sitting on a pile of cash and waiting for the market to turn down? And it will.
It's a great life anyway. Isn't it nice, whether you are a bank or an owner, to have these dilemmas? No one is losing money. Everybody is making money. Or are they? Many banks in Greece now do their accounting in EURO. So, despite the great market, the zero loan loss provisions and so on, profitability is down and head office is moaning. Bankers must continue putting loans on the book in order to replace run-off and to grow the portfolio. So, dilemma or no dilemma, lending continues.
When the Greek stock market boomed in the 1990's there was many a paper millionaire in the making. How many cashed out? Not many, if you listen to the moaning and groaning that has continued since then. Will today's shipowners be any different? Net worth is here today, gone tomorrow if we are talking shipping assets. Cash is king. And imagine what that cash will enable the entrepreneurial owner to do in two or three or four years when the market is nearer to normal levels. Then there will be a real bonanza. [by Kevin Oates, Marine Money Greece]
Source: Marine Money Magazine, April 2004

Kyrenia ship to sail for Greece with copper for Olympic medals
---NICOSIA, April 16 (Xinhuanet) -- A full-size replica of the ancient Cypriot vessel, the Kyrenia ship, will sail for Athens from Limassol on Saturday, carrying copper for the bronze medals for this year's Olympic Games. According to local press on Friday, Kyrenia-Liberty, named after the original Kyrenia ship, will leave Limassol for Paphos, and will stop at 10 Greek islands before reaching its final destination the port of Piraeus on May 14. "The ship will also carry symbolic presents to the host city ofthe Olympic Games from all the ports of call, which are organizingwelcoming ceremonies for Kyrenia-Liberty," Takis Neophytou, head of the Kyrenia Chrysocava Cultural Foundation said. He said this unique venture claimed a special place in the cultural events being organized during the Olympic Games year in Greece. During the journey, scientists will record data to help research into navigation in ancient times. "This is no ordinary journey for Kyrenia-Liberty. It is a journey that connects the past with the present and the future of this land, and it brings Cyprus closer to Greece and carries the Olympic ideals," said Nicos Timotheou, General Director of the Cyprus Telecommunications Authority (CyTA), the official sponsors of the trip. Kyrenia-Liberty, constructed at an estimated cost of 220,000 USdollars, was launched in November 2002. It is an exact replica of the early 4th century BC vessel, which measured 14.75 meters in length and 4.30 meters in width. The ancient ship of Kyrenia was discovered in the 1960s by Cypriot pioneer scuba diver Andreas Kariolou and has since become a symbol of peace and reconciliation. Since her discovery she is kept in Kyrenia Castle in northern Cyprus. End item.
Source: 2004-04-17 10:19:24

Cargo fleet operator pleads guilty in oil-handling case
---Greek company didn't account for how it handled waste oil.
The Greek operator of a fleet of 28 cargo ships that call on American ports pleaded guilty yesterday in U.S. District Court in Tacoma to a federal felony for failing to account for how it handled waste oil.
The case against Marmaras Navigation Ltd. is the ninth criminal case in 18 months brought by the federal prosecutor in Seattle against maritime companies and ship engineers for improper handling of waste oil or for failing to correctly record how the oil was disposed of, according to the U.S. Attorney's Office.
Last April, U.S. Coast Guard inspectors boarded the M/V Agia Eirini in a routine action while the Marmaras ship was docked in the southwest Washington port of Kalama, according to a plea agreement filed with the court. The inspectors spotted a flexible hose near a machine that separates waste oil from water in the ship's bilge. There were also indications of wear on a valve that discharges material into the sea.
The inspectors examined an incinerator on the ship and determined that it could not burn all the waste oil produced by the vessel. Finally, an oil record book did not accurately record the disposition of waste oil.
The plea agreement calls for Marmaras to pay a criminal fine of $200,000 and deposit $50,000 into an escrow account to pay for a proper waste-oil management plan. Up to $100,000 of the fine may be allocated to pay for an environmental restoration or preservation project on the Washington coast.
The U.S. attorney has also conducted recent prosecutions of:
* Hoegh Fleet Services A/S, a Norwegian operator of 38 cargo ships, which pleaded guilty in March to seven felony counts including concealing evidence of intentional dumping of waste oil into the ocean. Hoegh could face a fine of $3.5 million when sentenced in June.
* Vincent Genovana, a Filipino ship engineer on a Hoegh vessel, for felony falsification of documents and covering up evidence to obstruct a Coast Guard investigation.
* Ta Tong Marine Co. Ltd., a Taiwanese cargo fleet operator, which was fined $750,000 in July for two felony convictions of falsifying records to conceal the intentional dumping of over 20 tons of oily waste into the sea.
* Unix Line Pte. Ltd. of Singapore and Springs Navigation S.A., a Panamanian company, which were fined $750,000 in February 2003 for negligent dumping of oily waste into Commencement Bay and for making false statement in their oil record books. The companies were also ordered to implement an environmental-compliance plan for their fleet of 14 cargo vessels that visit U.S. ports.
Source:, by Paul Shukovsky, Seattle Post-Intelligencer Reporter, April 15, 2004

Agreement between Greek Administration and Bureau Veritas
---French leading Classification Society, Bureau Veritas, has signed the 2nd revision of the Agreement with the Greek Administration on the delegation of statutory inspections and certification services for vessels flying the Greek flag.
The new revision delegates Bureau Veritas to include all passenger ships independently of their tonnage, as well as all domestic cargo ships.
Full authorization has been given as well to all items related to ISPS Code with regard to verification and approval of the ship security plan and relevant amendments, as well as verification and issuance of endorsements and renewal of any kind of International Ship Security certificates.
The signing of the Agreement between the Chief in command of the Hellenic Coast Guard, Vice Admiral Christos Delimichalis, and the Ships in Service Managing Director of Bureau Veritas Paris, Mr. Claude Maillot, took place in the Marine Club of Piraeus.
Upon the completion of the signing, Messrs. Claude Maillot, Didier Bouttier, Lambros Chahalis & Anastassios Angelopoulos, top management of Bureau Veritas, hosted the team from the ministry of Merchant Marine, Messrs. Christos Delimichalis, Vice Admiral - Chief in command of the Hellenic Coast Guard, Apostolos Kamarinakis, Commodore - Head of Merchant Ships Inspection Service Directorate, Captain Michalis Mantzafos, Director of Regulations & Organizations Directorate, Captain Vassilis Dimitropoulos, Head of Classification Societies & International Organizations, Captain Kosmas Krommydas, Head of New Constructions & Plan Approval Division, Captain An. Ambatzoglou, Head of Ships in Service Inspections, Lieutenant-Commander M. Florakis, & Lieutenants junior grade Chr. Bibis & Chr. Zoumbos.
Source: Bureau Veritas, 16 Apr 04

Nick Tsakos on Bloomberg television and radio
---Our friend Nick Tsakos, President and CEO of Tsakos Energy Navigation, has joined a long list of shipping professionals to be featured on the financial television networks. Nick's agenda is to discuss "Industry and Company Outlook, Corporate Developments, and Top Industry Issues". The Bloomberg Television UK interview took place live at 2:15 p.m. ET and the Bloomberg Radio interview will be presented from 7:20 p.m. ET to 7:29 p.m. ET. The Bloomberg Television interview can be seen live on Bloomberg TV-UK at 2:15 p.m. ET, and can also be accessed live on the Bloomberg terminal, using the AV function, also at 2:15 p.m. ET. The interview will also be available live at
Source: Freshly Minted,, 16 Apr 04