Page 73: of Maritime Reporter Magazine (April 1992)

Ship Prices Drop

Amid Competition

For New Orders

Amid stiff competition for ship orders from Eastern Europe, the economic recession, and general uncertainty over new rules for ship- building, prices for new ships have begun to drop in recent months. This drop follows several years of rising prices.

However, several industry ana- lysts believe that this price drop will be short-lived. Analysts forecast that prices will begin to rise once again as soon as replacement ton- nage demand picks up speed.

The present price for a single- hull 280,000-dwt VLCC built in

Korea or Japan, for example, is about $87 million. In November and De- cember 1991, prices for the same size vessel were hovering in the $90 million to $91 million range.

AWO Urges Change In

USCG User Fees Proposal

The American Waterways Opera- tors (AWO) recently submitted com- ments on the Coast Guard's pro- posal to impose user fees for vessel inspection as mandated by the Om- nibus Budget Reconciliation Act of 1990. AWO's comments were devel- oped with considerable member in- put and focused primarily on the proposed $955 fee for deck barges.

Under the new user fee schedule, operators of inspected vessels which are also classed by the American

Bureau of Shipping (ABS) will be forced to pay twice for inspections which are largely duplicative. AWO therefore urged the Coast Guard to expand the scope of its Memoran- dum of Understanding with ABS to permit the classification society to conduct the dry dock inspections now performed by both ABS and the

Coast Guard.

AWO also argued that the pro- posed fee for deck barges is based on an exaggerated estimate of inspec- tion time. While the Coast Guard assumed approximately 11 hours of inspection time annually, at a per- hour rate of $87, data provided by

AWO members suggests that three and a half to five hours, depending upon a vessel's size, is more accurate.

AWO proposed that the Coast Guard assess maximum fees of $200-$300 for small or medium sized barges and $250-$450 for large barges.

Alaska Considers

Exemption To Direct

Action Requirement

The direct action requirement of

Alaska state law, which makes pe- troleum transportation carriers and their insurers liable for any spills, has been a major problem for opera- tors since the early 1980s. Now, however, a bill has been introduced in the Alaska legislature which would permit an exemption to the direct action requirement of the evi- dence of financial responsibility based on certain criteria.

An exemption would be issued if: (a) the applicant provides proof of $50,000,000 for crude oil operations; or (b) provides proof of the required level of financial responsibility to cover judgments in the case of non- crude operations; (c) provides a sworn statement or affidavit that insurance or another form of finan- cial responsibility that meets the requirements of this section is not available.

The state of Alaska has issued exemptions, up to this point, on an ad hoc basis. The new legislation, which is in committee, would pro- vide the state with the statutory authority to issue exemptions for up to two years.

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