Hungry Stena Line expands Baltic Sea business

Stena Line has acquired five ferry routes operating between Sweden and Germany to Latvia. The three routes, Travemünde to Ventspils and Liepaja as well as the route Nynäshamn-Ventspils have been acquired from Scandlines GmbH. Stena Line has also acquired Scandlines GmbH's vessels and operation on the routes between Trelleborg to Sassnitz and Rostock.

"Through the acquisition of the routes from Germany and Sweden to the Baltic States, we are increasing our presence in the southern Baltic region and expanding our offering for both freight and passengers. Our ambition is to continue developing the new operations in order to give our customers better service and capacity," says Gunnar Blomdahl, CEO for Stena Line.

The acquisitions have been driven by strong growth in sea transports to and from the Baltic region, which is expected to continue. The Baltic route acquisitions involve three vessels, two of which are chartered.

Apart from the purchase of the three routes between Germany and the Baltic States, Stena Line is also acquiring the vessel 'Sassnitz' and the operations on the routes from Trelleborg to Rostock and Sassnitz. These routes have previous been run jointly with Scandlines GmbH, via Stena Line's subsidiary Scandlines AB, under the Scandlines Hansa brand. Stena Line will now be the sole owner of the routes, which are currently operated by four vessels. The Trelleborg routes as well as the new routes to Latvia will operate under the Stena Line brand.

In total, the transaction will involve approximately 300 employees in Germany and the Baltic States. Staff that are currently employed with Scandlines in Germany, Lithuania, Denmark and Latvia and who work on the acquired routes will be offered new positions with Stena Lines.

The deal is on the assumption of approval from the German competition authorities.

The news comes on the heels of Stena's acquisition of the Liverpool-Belfast Irish Sea route for £45m last summer. Last month the company confirmed that it has now purchased the 'Stena Mersey' and 'Stena Lagan', the two RoPax vessels that had been operating the service on a charter basis.

The ships underwent a £4m refurbishment upgrade at the Harland & Wolff shipyard in Belfast and as Stena Line's Area Director (Irish Sea) Michael McGrath said, they will play an important part in helping to develop this important commercial link between both regions, he said: "When we purchased the route last summer we conducted a comprehensive review of the service and a key consideration was the status of the ships. The vessels were an excellent fit for the route which is an important freight and passenger channel and purchasing the ships meant that we could commit significant resources into bring the 'Stena Mersey' and 'Stena Lagan' into the Stena Line family and give the ships our own unique look, feel and high quality service.

The 'Stena Mersey' and 'Stena Lagan' were built at the Visentini shipyard in Italy in 2005 and can accommodate 980 passengers and provide 2 662 lane metres for freight and passenger vehicles. Both ships are equipped with 121 Cabins (4 berths) and provide two daily sailings from Liverpool to Belfast.  

Paris commercial court set to deliver verdict

Having delayed its decision for a preferred bidder for the three former SeaFrance ferries for a third time, a French court was expected to finally deliver its verdict on June 11th.
Stena Line subsidiary Stena Ro-Ro, Eurotunnel and DFDS Seaways all submitted bids for the collapsed ferry operator's vessels.

It is understood the court was looking for a solution that will allow it to accept Eurotunnel's offer. The Channel Tunnel operator is said to be keen to acquire the vessels and then charter them to the sacked staff to operate the Calais – Dover link. However, the problem is Eurotunnel's bid was relatively low in monetary value and does not provide scope to reimburse SeaFrance's lower-tier shareholders."

Eurotunnel reportedly bid €61 million for all three SeaFrance vessels, the 'SeaFrance Berlioz', 'SeaFrance Rodin' and the 'SeaFrance Nord Pas de Calais', and an additional €4 million for the firm's assets.

Stena, who made an eleventh hour offer, bid €30 million for the 'SeaFrance Rodin', while DFDS offered €25 million and a further €30 million for the 'SeaFrance Berlioz'.

All three offers on the table fall well short of SeaFrance's liabilities, thought to be in the region of €150 million. The decision will depend on French state owned railway company SNCF, the owner of SeaFrance, and whether it is willing to forego part or all of the debts it is owed by SeaFrance.

Failing an agreement, the bankruptcy judge could order a second round of bidding or hold an auction for the vessels.

The Stena move prompted speculation that they might be looking at a return to the English Channel; the company sold its minority share in P&O Stena Line to P&O Ferries some years ago. The Swedish company was quick to dismiss any idea of a return to Dover saying the ship would be operated elsewhere.

In serious need of replacement is the Fishguard – Rosslare vessel 'Stena Europe'. One possibility might be to deploy any acquisition on the Holyhead – Dublin service, enabling a withdrawal of the HSS fast ferry 'Stena Explorer' and the transfer of the route's 'Stena Nordica' to Fishguard. The end for the 'Explorer' has been foreshadowed for some time now and such a move would bring the curtain down on Stena's UK fast ferry operations.

Interesting to consider that would bring the total number of high speed car ferries operating in UK waters to just six. It was not so long ago that there were 13 Incat craft alone operating out of UK ports to Ireland, the Isle of Man, the Channel Islands and France.

Inquiry into loss of PNG ferry

The inquiry into the loss of the Papua New Guinea ferry 'Rabaul Queen' ended early in June with the ship's Australian-born owner and manager, Captain Peter Sharp, being called arrogant and disrespectful. As reported last month the 'Rabaul Queen' sank in poor weather off the PNG coast on 2nd February with the loss of over 140 lives.

In the final submission to commissioner Justice Warwick Andrew, made in Port Moresby, Mr Mal Varitimos, the Brisbane barrister acting as counsel assisting the inquiry, said Sharp, and the master, Captain Anthony Tsiau, "should accept responsibility."

Much of the questioning related to uncertainties around the number of people on board the vessel. Although she was only certified to carry 295 passengers, Captain Sharp said that there were 360 passengers, plus 14 crew, on board when she sank. He rejected submissions by Mr Varitimos that he had given false evidence over the passenger numbers and that he knew that there were more people on board. Drawing on ticket sales records and multiple inconsistencies on the manifest Mr Varitimos argued that there could have been 429 people on board, maybe 440 including infants under three years. Some 230 passengers were later rescued, and four bodies were recovered.

The inquiry heard that evidence showed the underlying reasons for the tragedy resulted from arrogance, apathy and a lack of accountability over many years; complacency and incompetence manifesting as gross negligence. The commission was told that while the National Maritime Safety Authority should not escape criticism, Captain Sharp's evidence demonstrated total disrespect for the deaths of so many passengers aboard the vessel. Interestingly the NMSA was chaired for some years by Captain Sharp's brother Hamish, also a ship owner.

In a further stinging assessment Captain Sharp was "unfit to operate companies carrying large numbers of passengers" and was "prepared to place financial gain ahead of the safety of his passengers and crew," Mr Vartimos said. Further, he "had an overwhelming personality and considered that he was a law unto himself. This was reflected in the "appalling conditions in which he was prepared to allow passengers on "Rabaul Queen" to travel," Vartimos said.

He was accused of creating "inhumane" conditions on board his ferries by routinely overloading them through the peak summer traffic periods; of sailing vessels without qualified crew, safety and maintenance routines, and, on occasion, valid survey certificates; of providing inaccurate information to insurers; of bullying and intimidating authorities; and of allowing a vessel not fit for high seas to sail in gale force conditions.

Erik Andersen, for Captain Sharp, said the ship "was hit with three extraordinarily large waves – rogue waves or acts of God – clearly well outside the range of sea conditions at the time." Sharp conceded that when he bought the ship 13 years ago it was being used for smooth waters, in Japan's inland sea. He said, "someone in the Transport Department" had questioned the suitability of the vessel for PNG waters. The ship's survey certificate issued in 2003 licensed it "to operate in conditions below force 7." He agreed with Mr Varitimos that "any competent and responsible operator of a passenger vessel would not send it to sea without accurate, reliable and timely weather forecasts . . . if they're available." If they were not, he said, the master could still send a ship to sea.

He told the inquiry that he would not have sailed the 'Rabaul Queen' in gale conditions, but "probably would have allowed it to sail" in force 7 winds of between 28 and 33 knots. Captain Sharp usually obtained weather information on the internet from the Queensland Bureau of Meteorology – which on 31st January warned of three cyclones in the western Pacific. He said he looked at the website of the Hawaii-based America Joint Typhoon Warning Centre. But he said he never sought information from the PNG Weather Bureau, or from PNG Coastal Radio, which was often, he said, "at least 24 to 48 hours behind what's actually happening."
"I know they're totally unreliable," he said. "I knew better the conditions than they did."

When the 'Rabaul Queen' sailed on its final passage from Kimbe to Lae – which usually takes 21 hours – the PNG Weather Bureau was warning of wind force 8 or 9. Captain Sharp said that even if he had been advised of that gale warning he would "not necessarily" have prevented the ship from sailing. He would have contacted the captain and discussed the situation.
He admitted that in 41 years he had never sought information from the PNG Weather Bureau, preferring to piece together his own weather reports from Australian and American meteorology sites and distributing these to his crews. Brisbane barrister Mal Varitimos, assisting the inquiry, argued "your arrogance has in part led to this disaster."

"No, it's not arrogance. It's experience," Captain Sharp replied.

Justin Merrigan