Government to Issue Guarantees for New Ships at 3. Maj Shipyard

Total Croatia News

ZAGREB, March 6, 2020 – The government is prepared, under certain circumstances and strict control, to issue guarantees for 48% of the value of new ships for the Australian Scenic Group that would be built in the 3. Maj shipyard, Economy Minister Darko Horvat said at the Rijeka-based dock after talks with the Scenic Group’s owner and the 3. Maj director.

Horvat, Scenic Group owner Glen Moroney and 3. Maj director Edi Kučan discussed the construction of five polar cruise ships with a total value of €860 million.

We consider that the agreement was reached about ten days ago when we accepted the mutual interest of the shipyard and the client to invest in 3. Maj, to rehabilitate the dock and build sophisticated ships, Horvat said.

The government is willing to assist 3. Maj under certain conditions and strict control, and issue guarantees at the ratio 48 to 52 per cent, which the client has agreed to, Horvat explained.

Horvat believes that that is a fair division of responsibility, with strict supervision and pace of construction.

Asked when would that agreement enters into force, he said at the very moment when a request for the first guarantee is received.

For the state, that means the continuation of shipbuilding at 3. Maj, Horvat said.

Asked whether that means the end of the dock’s agony, Horvat said that he would not be that optimistic. The state, he said, has done its share and now the dock’s management has to do its part.

Asked whether a car transport ship (514) that was to have been built in the Uljanik shipyard in Pula would now end up in 3. Maj, Horvat said that that is something for lawyers to deal with. “Once lawyers come to an agreement over the methodology, then the government will give its consent,” he said.

He underscored that the bailout of 3. Maj has been planned on the basis of three ships being completed, which includes ship 514 being completed in 3. Maj on schedule. “With the completion of ship 514, we will be able to talk about the repayment of the loan of HRK 150 million which HBOR issued to kickstart 3. Maj and give it further prospects,” he said.

Kučan confirmed that the construction of the ships for the Australian company means the salvation of 3. Maj. “We saw, together with the government, that we can survive on the global market by building specialised ships. We supported the owner of the Scenic Group, Moroney, with whom I already successfully collaborated in Pula on the construction of the Scenic Eclipse. We saw the right partner who can ensure our survival and continuation of production in Rijeka”.

Kučan said the deal would not burden taxpayers. “We have received a loan from the government to launch production and with the successful completion of the ship, we will repay that loan,” he underscored.

Moroney said that the entire ship would be constructed and equipped at the Rijeka dock.

Asked why he selected 3. Maj for that task, Moroney said that he did so primarily because of the people. One ship has already been built for Scenic, nearly the entire team is from this region and Croatia, he said and added that shipyards without the people and their experience don’t mean anything.

Asked whether he would be prepared to be a strategic partner in 3. Maj, Moroney said that it is necessary to see how things develop and to take one step at a time.

We want to build many more ships. For now, the plan is five. The ships need to be completed on time and within budget and in accordance with agreements. If that happens, then who knows, he said.

More news about Croatian shipyards can be found in the Business section.


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