Greek Shipping News Cuts
Week 21 - 2006


Greece's 131-strong ferry fleet could dwindle to just 47

---Greece's Athens Stock Exchange-listed ferry operators will continue to struggle unless new investments are made and this will only happen with further liberalisation of the domestic ferry network. While the government's cautious moves towards liberalisation show a willingness to harmonise Greek legislation with European Union legislation, more has to be done to stop the Greek passengership fleet shrinking.
In its annual analysis of the ferry sector, business consultant XRTC calculates the number of ships the six will have in service this year is 87 with reduction of 18% annually over the next two years. XRTC says the need to phase out ships over the mandatory 30-year withdrawal age under Greek law plus the need to sell because of increasing financial pressure will see "many communications problems due to the shortage of ships", says XRTC.
Between 1999 and 2002, the six companies invested $3.5bn in new ships but no big order in the passengership sector has been placed in the past five years, says the report. Investments were made as owners anticipated full liberalisation of the sector from the beginning of 2004, a move that has still not been completed.
The report says the government's failure "to take the necessary daring decisions" has lead to the lack of new investment. The support of the banks which realised loans could only be serviced if the ships were operating has helped the situation. However, even if the ships are full the price charged has still to justify investment in new ships. The report notes that the age of the fleet has come down from 17.7 years to 12 years. It also says that a reduced fleet means less competition thus offering companies an easier operating climate.
XRTC welcomes the growing presence of reefer operator Panos Laskaridis, who now holds a 17% share in Hellenic Seaways, and a 5.2% stake in Minoan Lines, which in turn has a 33.3% share in Hellenic Seaways. It also notes the presence of another newcomer, Ioannis Arvanitis, who has a 20.8% stake in Nel Lines.
XRTC calculates passenger movements shared by the companies was down 7%, car traffic by 12% and trucks by 3%. On top of that, bunkers and lubricants rose by 30%. But still, XRTC says, the aggregate net results of the five listed companies showed a 38% increase.
Source:, 26 May 2006 Vol. 7 / No. 20

Coastal shipping appears to be on the right course
---Greek coastal shipping sailed on a positive course in 2005, achieving a decline in its bank borrowing by 4 percent and increasing both its turnover by 4 percent and the improvement of its net results by 38 percent compared to 2004, according to the XRTC consultancy firm.
At the same time the sector is showing a decline in the passengers and vehicles carried, a drop in active ships and a rise in operation costs due to oil prices.
Companies must also realize that the national network of maritime transport does not only include profitable routes but is also a public service for remote and unpopular islands.
In 2005, despite the rise of fuel prices by 30 percent, companies achieved a significant improvement in their turnover and their profits.
The total cost of fuel in 2004 for listed companies reached 199.2 million euros, or 47 percent of operating costs, and rose to 257.7 million euros in 2005, or 64 percent of operating costs.
Listed companies last year recorded a rise in turnover of 4.7 percent in the Aegean market year-on-year and a 3.5 percent rise in the Adriatic. Earnings before interest, tax, depreciation and amortization rose by 1.4 percent compared with 2004, while total investment in new ships in the 1999-2002 period came to $3.5 billion. However the lack of investments means the number of ships shrank from 131 in 2002 to just 87 last year
By Nikos Bardounias - Kathimerini
Source:, 24 May 2006

Attica Group Q1 Sales Up 8.5%
In Adriatic Market, traffic volumes for Superfast Ferries were decreased on the back of a 15.5% reduction in the number of sailings of the Superfast Ferries on these routes (passengers decreased by 15.4%, private vehicles decreased by 20.0%, freight units decreased by 17.2%).
However, traffic of Blue Star vessels was significantly improved (passengers increased by 43.4%, private vehicles decreased by 35.1%, freight units decreased by 123.1%).

Eurofin targets $100m tanker war chest
---Vegetable oil trades venture Merlin Tankers set to take advantage of tonnage crunch with two vessels after raising $20m from private investors, writes Tony Gray- Thursday May 25 2006
A NEW ship investment fund targeting the niche but lucrative vegetable oil trades has been launched by Eurofin.
Merlin Tankers is starting life with two vessels after raising $20m from private investors.
Specialist ship finance adviser Eurofin is already homing in on a third vessel for the venture and contemplating raising up to a further $100m for a second phase of investment.
Merlin has purchased two 38,000 dwt tankers, built in 1982 and 1983, which will be dedicated to the vegetable oil trades.
They are the Merlin Champion (ex Alfios) and Merlin Trader(ex Dignity).
Both vessels are now on their way to China where they will be converted to full double-double configuration, bringing them up to IMO Cat II standards.
Mr Koenig pointed out that new IMO regulations on the carriage of edible oils meant that from next January 1 these cargoes would have to be carried in IMO Cat II or III vessels.
Merlin Tankers, which is managed by the Eurofin Group, is also about to complete the acquisition of a third vessel.
This tanker would be of a similar size and vintage to the first two, Mr Koenig said.
The third vessel is also expected to undergo some upgrading work in China.
The next stage could involve raising funds of $80m-$100m, he said. This cash-raising exer- cise would probably target insti- tutions rather than private investors.
Eurofin has been working on the Merlin Tankers project for more than a year.
The independent financial adviser has been active since the mid-1980s and celebrated its 21st anniversary last year.
Eurofin has offices in London, Athens and Istanbul.

Callimanopulos lifts investment niche fleet
The MT6016 L-design diving support unit at Kleven Verft yard is 103mtr-long and cost $49.38m. No price tag has been attached to the Netherlands newbuilding but brokers estimate it could cost $80m.
It will be equipped with cranes and a helideck and will be able to reach speeds of 13.5 knots. It will operate worldwide. At 132mtrs this DP3-type is an advanced version of the 8,650dwt Toisa Proteus, also built in the Netherlands and commissioned in 2002.
highly specialised niche market.
Toisa says the average age of ships in the existing saturation diving market is over 20 years and its DP3 ship meets "the higher and more demanding standards in safety, dynamic positioning operations, saturation diving and use of environmentally sensitive vessels".
Able to sleep up to 199 persons it "meets the need for subsea construction vessels to accommodate large number of contractors".
Source: NEW MARINE TECHNOLOGY [NEWMARTECH] Issue No. 9 March/April 2006, NEWMARTEC is published monthly and is complementary to NEWSFRONT.

Diana Shipping signs a $300 Million Amended Credit Facility With RBS
---ATHENS, Greece, May 24 /PRNewswire-FirstCall/ -- Diana Shipping Inc. (NYSE: DSX), a global shipping transportation company specializing in dry bulk cargoes, has entered into an agreement amending its $230.0 million revolving credit facility with the Royal Bank of Scotland plc, to increase the facility amount to $300.0 million.
The amended credit facility has a term of ten years from May 24, 2006, the new availability date, and the Company is permitted to borrow up to the facility limit, provided that conditions to drawdown are satisfied and that borrowings do not exceed 75% of the aggregate value of the mortgaged vessels. The facility limit will be $300.0 million for a period of six years (increased from five years) from the availability date at which time the facility limit will be reduced by $15.0 million (decreased from $20.0 million) to $285.0 million. Thereafter, the facility limit will be reduced by $15.0 million (increased from $13.5 million) semi-annually over a period of four years with a final reduction of $180.0 million at the time of the last semi-annual reduction.
Diana Shipping Chairman and Chief Executive Officer, Simeon Palios, commented: "We are pleased to announce an amended credit facility that will enhance our Company's financial flexibility, provide further resources to support our future growth, and provide savings in our finance costs compared to the previous facility."
The amended credit facility contains various industry standard financial covenants.
The amended facility will bear interest at the rate of 0.75% to 0.85% over LIBOR (decreased from 1% over LIBOR), depending upon the amount drawn as a percentage of the value of the vessels. The Company will pay a commitment fee of 0.25% per annum (decreased from 0.35%) on the undrawn amount of the facility.
SOURCE Diana Shipping Inc.

PM sees positive prospect in investments and trade relations with China
Olive oil exports to China have increased 30 percent after the campaign for the promotion of the Greek product on the Chinese market, which undertaken by the prime minister as well during his trip to China, while talks continue for the establishment of direct flight between Athens and Beijing.
Also, the largest container ship in the world, with a capacity of 9,500 containers, is due to sail into the port of Piraeus in June. The ship belongs to a Greek-interest company and its inauguration will take place in Piraeus.
Source:, 25 May 2006

Downie on Grecian Expedition
---ALEX Downie, Minister for Trade and Industry, will be schmoozing Greek shipping magnates, when he jets out to Athens for an exhibition.
He will represent the Island at Posidonia, the world's largest shipping exhibition, which kicks off on June 5.
He said: 'It allows us to meet personally with our Greek clients to discuss matters of mutual interest and to keep them informed of the latest developments involving the register itself annd the corporate advantages for shipping business in the Isle of Man.
He added: 'Many of the world's largest ship owners are Greek, it is imperative we maintain a presence in such an international forum and take advantage of the many networking opportunities available.
26 May 2006

ICS forum in Athens draws crowd
---Greek shipowners had their say when they attended a discussion forum hosted by the Greek branch of the Institute of Chartered Shipbrokers (ICS).
Held at the auditorium of the Eugenidion building in the suburb of Palaio Faliron, the crowds packed in to listen to a panel of owners, brokers and bankers share views about the challenges facing the Greek shipping sector.
Speakers included shipowners Captain Panayiotis Tsakos, Dr John Coustas, Costas Comninos, brokers Stelios Tzitzis of Clarkson (Hellas) and George Banos of George Moundreas and bankers Dimitris Anagnostopoulos from ABN Ambro, Vasilis Matzavinos of Bayerische Bank and George Xiradakis of XRTC.
With Nicolas Tsavliris as moderator and Natalia Margioli as conference host, a vibrant discussion followed in which other owners voiced some of their concerns. These issues included the dwindling numbers of Greek seafarers, the perceived inadequacy of the Greek state in addressing crewing challenges and the benefits of supporting Piraeus's evolving shipping-services sector.
The debate flowed into the reception area later in the evening during a buffet dinner. Shipowners Antonis Mavrakakis of Mayamar Marine and Spyros Karnessis of European Navigation, both of whom where outspoken during the forum discussion, joined a number of other owners to exchange views and ideas, including Paris Dragnis of Goldenport, Harry Tsatsakis of Modion, Thanassis Martinos of Eastern Mediterranean, Elpi Petraki of Enea Management to name a few.
Source:, Yiota Gousas Athens, published: 26 May 2006

Worsening weather and restricting regulations add to salvors' woes
---[May 25, 2006] (Lloyds List Via Thomson Dialog NewsEdge)WHETHER global warming is indeed the cause, there is no doubt that extreme weather events are on the increase, warned Hans van Rooij, president of the International Salvage Union.
This has some important implications for salvage provision, particularly the availability of heavy salvage units needed to clear wrecks, part-discharge and refloat grounded vessels and restore waterways for safe navigation,' he said.
Mr van Rooij made his remarks recently in a keynote address at ITS 2006, held in Rotterdam. But it was not just the weather that was on his mind.
With governments increasingly keen to focus on marine protection, the salvage industry is becoming the focus of some unwanted and probably unintended attention from the regulators.
As a result, the ISU is now having to grab the regulatory bull by the horns and is doing its best to ensure that the salvage companies have an input into laws which affect their daily activities.
The industry must be prepared to self-regulate if it is to avoid the imposition of regulations developed by people with no direct experience, he said.
Mr van Rooij said the ISU continued to campaign in defence of the salvor's freedom of action in pursing both pollution prevention and property recovery.
It was for this reason that the ISU joined Intertanko and other industry partners including Intercargo, the Greek Shipping Co-operation Committee and Lloyd's Register in applying to the London High Court for a judicial review of the European Union Ship Source Pollution directive.
'We believe that this directive will aggravate the alarming trend towards the criminalisation of marine accidents,' he said.
It is hoped the High Court will refer the issue to the European Court of Justice, added Mr van Rooij.
With his usual direct Dutch approach, Mr van Rooij stressed that this was not a mere academic problem for salvors but a very real operational one.
His main worry was the directive's reference to 'serious negligence'. 'The term is not defined and there is a real possibility that its use will lead to subjective prosecution decisions,' he said. The ISU shared the entire shipping industry's concerns about the need to preserve the International Maritime Organization's primacy.
'The ISU is well aware of the importance of a harmonised approach to regulations, guidelines and codes,' he went on. 'A fragmented approach in the area of marine casualty response can only make the salvor's task more difficult.'
This commission directive was a disturbing escalation of the criminalisation problem, he said. France had already introduced draconian penalties for pollution. New Canadian laws criminalised marine accidents. Spain, joined by Mexico, was sponsoring an IMO initiative to restrict ship-to-ship operations, extending beyond the territorial sea.
'The IMO is now developing Marpol amendments to implement these proposals which supposedly are aimed at greater control over routine ship-to-ship activities,' said Mr van Rooij.
The problem was that these provisions could be abused. 'A coastal state could use them to justify the refusal of a legitimate request for refuge for a casualty,' he added.
It was particularly ironic that Spain and Mexico were arguing for new powers to restrict or prohibit ship-to-ship operations in special or particularly sensitive sea areas.
A salvor's freedom to perform a ship-to-ship on a laden tanker at a sheltered location was an essential means of protecting these vulnerable areas, Mr van Rooij declared.
'The IMO may well introduce the new powers with the best of intentions but some coastal states, almost certainly, will misuse them,' he added.
He made it clear that it should never be forgotten that effective emergency response was what salvage was all about.
This point had been underlined once again in the second half of last year when hurricanes Katrina and Rita struck the US Gulf. 'The scale of the devastation caused defied description,' said Mr van Rooij.
ISU salvors responded to the large number of rigs abandoned as Katrina approached. Ships were refloated after a series of groundings in the Mississippi.
One US salvor's typical experience in the aftermath involved the refloating of 48 vessels over a seven-week period, ranging from hopper barges to a large bulk carrier.
The number of gigantic storms making landfall in the US Gulf during 2005 broke all records. 'There is still much controversy over the significance of global warming,' said Mr van Rooij.
'Yet, there is also a growing consensus that the number of extreme weather events is increasing.'
This had some important implications for salvage provision. Heavy salvage units were needed to clear wrecks, part-discharge and refloat grounded vessels and generally restore waterways for safe navigation.
Although supporting the IMO, Mr van Rooij was not overly-impressed that the IMO itself had shied away from commitments made to tackle unresolved issues left when the international guidelines on places of refuge were first introduced.
The United Nations agency's legal committee had the job of resolving these 'difficult issues including financial liability', but last year the committee decided to put this on ice.
Mr van Rooij stressed that the ISU believed that the present international guidelines on refuge did not go far enough.
The salvors had put forward a new concept for more comprehensive guidelines on marine casualty management which would deal with all aspects of casualty management, in contrast to the existing IMO guidelines.
The Maritime Safety Umbrella Operation supported the ISU proposals and the ISU hoped to work on the joint development of the casualty management guidelines.
Members continued their commitment to the Lloyd's Form.
This year they had taken the decision to introduce a Lloyd's Form levy. Every full ISU member had to contribute GBP1,000 ($1,750) per Lloyd's Form awarded to a special ISU fund.
This would be used to promote and maintain the LOF system. 'The decision underlines our continued commitment to Lloyd's Form, which remains the ideal contract for providing salvage assistance under emergency conditions,' Mr van Rooij said.
This message must be put across more effectively to industry, regulators and governments and the new fund would provide resources to step up its activities on this front and generate increased mutual understanding, Mr van Rooij added.
The new year also brought long-awaited agreement on higher Special Compensation P'I Club Clause rates for personnel following difficult and lengthy negotiations between the ISU and the clubs.
A 10% increase in personnel rates had been accepted which was the first increase in rates since Scopic was introduced in 1999. The rates for equipment and vessels, however, would remain unchanged until at least September.
But Mr van Rooij stressed that the external dimension was the public interest component of Scopic: 'Special compensation is meant to encourage salvors to respond to all marine casualties.
'Even in those low-value or high-risk situations a conventional no cure, no pay salvage contract might fail to provide an appropriate reward. For this reason this achievement is indeed significant.'
He also spoke candidly about the proposed introduction of environmental awards for salvors who prevent pollution, the so-called 'parallel remuneration'.
Under Article 13, salvage awards would continue to reward salvors who recovered property but a separate environmental award would be introduced to reward those who prevented spills and therefore reduced the burden of clean-up costs and compensation claims.
Significant progress had been made in that the ISU was beginning to define the mechanisms for introducing the system and funding environment- al awards. But it now had to bring these arguments before shipowners, the clubs and government and inter-governmental agencies.
'In our view, governments should welcome a new system providing more protection for vulnerable coastlines,' he said. 'As the primary beneficiaries of environmental salvage, governments should be willing to accept the initial responsibility for environmental awards and then recover the costs from the appropriate international compensation fund.'
There was nothing radical in this idea, he continued.
'In reality, it is no different from current practice when governments recover clean-up costs,' added Mr van Rooij.
There was no need to rewrite the various compensation conventions as the test was the familiar one of 'reasonableness'. Essentially, environmental salvage would be regarded as a 'reasonable expense' to prevent far more costly environmental damage.
'Coastal states accepting the initial responsibility for environmental awards would almost certainly save money,' he said. 'The salvor would have a greater incentive to prevent pollution.'
There would be no environmental award unless pollution was prevented, he suggested. 'There are no losers in this common sense approach,' Mr van Rooij said. 'This proposal is sure to have public support and is in line with the growth of the world's environmental conscience.'
He concluded: 'Our industry faces plenty of challenges and the successful management of these issues will require well co-ordinated industry action. No one sector can act effectively in isolation.'