Rushing to renovate tanker fleet

  • 2000-09-07
RIGA (BNS) - The Latvian Privatization Agency board will soon consider the tanker fleet renovation project proposed by shipping company Latvijas Kugnieciba (LASCO), LPA director general Janis Naglis said.

The question is presently under consideration at the LPA board committee and could be reviewed as soon as next week, but it depends on whether all required documents are drawn, explained Naglis.

LASCO management has asked for LPA's permission to go ahead with the tanker fleet renovation project.

LPA decided in November 1999 that LASCO can implement the tanker renovation project only after the first stage of the company's privatization is completed.

"LASCO's privatization has not taken place yet and the previous decision of LPA has also not been revised," LASCO President Andris Klavins told reporters previously.

He said, however, that the prices of vessels in the world have increased by 15 percent since the end of last year. If the trend continues, the price of the tanker fleet renovation will increase by some $22 million each year.

Presently LASCO's fleet has 37 tankers, three of which have been rented out with the right to be purchased. The average age of the tankers is 18 years, and they make up about 75 percent of LASCO's total revenues.

"The vessels' life is 20 years, thus the average age of the vessels is nearing critical level," Klavins said.

He said LASCO's action plan and budget for this year envisions ordering four Panamax type tankers and paying in advance. But to resume concrete talks with shipyards and institutions that would finance the project, the company needs consent of a supervisory institution, in this case the Latvian Privatization Agency.

The shipping company's council and shareholders meeting gave their consent to the project early this year, but LPA still has not made any decision in the matter.