Shipyard shareholders to invest some $100 million in new dock
FORT LAUDERDALE, FLORIDA – The crippling of two docks at the Grand Bahama Shipyard has drastically reduced the shipyard’s capacity to service ships, putting at least 100 Bahamian jobs at risk, according to Giora Israel, senior vice president of Global Port & Destination Development at Carnival Corporations.
Last April, the facility’s largest dock suffered “catastrophic structural failure” when a crane collapsed onto Royal Caribbean Cruises’s Oasis of the Seas cruise ship while it was being serviced.
The shipyard, which Royal Caribbean and Carnival Corporations is 80 percent shareholders, also suffered a significant hit when another dock was damaged during the passage of Hurricane Dorian in September.
In an interview with members of the Bahamian media yesterday, Israel said the “work horse” dock was unable to take large ships and had to broken down and sold for scraps.
The process to take it out the water and break it apart cost the company over $10 million, he revealed.
Since the incidents, Israel said the company has reviewed its roster and has had to send home hundreds of expatriate workers back to their home countries.
“We kept some that are key to the operation, and have decided to take extraordinary steps and have advised government that we will keep every Bahamian on a 40-hour week,” Isreal assured.
“We will try and not fire any Bahamians, although we don’t need all work force at all.
“We really can let a few go, maybe even 100 but we decided not to do so and just sweat it through a little bit until we are able to get the operation back.”
Isreal said the shipyard will be “losing a few tens of millions of dollars this year”.
He noted that added to those challenges is the added “pressure” as shareholders to support its operating expenses and its debt services for the loans that are outstanding at the yard.
However, Israel also revealed that the shipyard’s shareholders board has decided to invest $100 million in infrastructure and a new dock.
“We have recently decided that we will proceed and look at the possibility of making a major investment of building a new dry dock and replacing the one that was damaged,” he said.
“We are planning to meet with government late February or more likely the first or second week of March to discuss this new expansion of the yard.”
He explained that will they with the government on its needs, and will also have to work with the Freeport Harbour company on the lease extension on the land.
According to Isreal, parts of the shipyard’s lease on the land where it is located will be subject to renewal very soon.
He said there are also as “all sort of other things that we need to update in our relationship as they are now entering their 20th year of existence.”
“We are determined to make this yard, again a great yard, possibly bringing it back to the number one cruise ship repair facility in the world again,” he added.
“There is no reason for Grand Bahama to not be the maritime centre of the Americas.”
While $100 million remains a ballpark figure for the cost to bill the dock, Israel insisted that “it will be the biggest floating dock to be built in the last decade anywhere in the world and it’s likely to be built in China”.
Shipyard loss on economy
The loss of the services at the Grand Bahama Shipyard amidst the devastation of Hurricane Dorian has also impacted parts of the island’s economy, suggested the senior vice president of Global Port & Destination Development at Carnival Corporations.
Isreal noted that along with the impact on the Bahamian subcontractors, the Bahamian employees and the expatriates, there is also the lost of revenue from the island as the shipyard was “the largest renter of real estate in Grand Bahama”.
“We at times had 100, 200, 300 people and when we have a lot of ships in the yard, short term up to 30 – 40 days we may have another 100, 200, 300, so not only were we the single largest room buyers in hotels in Grand Bahama, as a shipyard and its clients and its ship owners, but also in apartments”, he explained.
“So all of that was lost.”
He further underscored that that lost was expanded because business is also being lost throughout the Caribbean as Caribbean-based ships are now forced to go to Europe to get repaired and will likely continue tours on that side of the world.
“So the shipyard has lost the business, The Bahamas has lost the business and the region has lost the business.”