SA-flagged ship ‘an act of faith’

Cape Town-based black empowerment shipping company, Marine Bulk Carriers (MBC), has just invested R300 million in a new anchor handling tug and supply vessel, and it is hoped that it will be able to sail under an SA flag and with an SA crew. But those two hopes are “still very much an act of faith”, according to MBC director, Jan Rabie. The legislation attracting a shipowner to register a vessel locally is not yet in place, he told FTW. However, he also pointed out that, within the department of transport (DoT), there was a technical review committee that was supposed to be sorting out such urgent issues – including the proposed tonnage tax as an incentive to shipowners to register their vessels locally. But Rabie’s act of faith is going to have to be strong, because getting all the relevant legislation amended appropriately is likely to take some time, and overcome some equally strong objections from affected parties. According to Shepstone & Wylie partner, Shane Dwyer, a first step would be to amend the Ship Registration Act. It was last “significantly amended”, he told FTW, on April 25, 2003 – when it imposed changes on the regime of ship ownership, registration and mortgage in SA, and made the ship’s register available to vessels majority owned by SA nationals. It also opened the SA register to bareboat charters inwards. “This,” said Dwyer, “changed the whole face of the thing.” But it still didn’t offer all the benefits that a shipowner would be looking for in local registry of a vessel. It would effectively allow Rabie to register his tug under the SA flag. What it wouldn’t do would be to offer the tax incentives available under other ship’s registers, and that’s a vital consideration when you have R300m committed to a vessel, and then all the running costs once it goes into service. Rabie is however not put off the idea of his R300m tug, and the SA flag is not a critical issue. “If flagging it under the SA flag doesn’t come off in time (the vessel is due to be delivered in 2015) we will simply go to an open register. And we can sail under that flag until they get all their ducks in line.” And it’s not going to distract MBC from attacking its potential market. “We’re looking at the offshore oil and gas industry,” said Rabie. “Namibia, which is our base, and Mozambique – where there have been massive oil and gas finds recently – will be our initial focus.” • Due to space constraints, this article has been abridged. The full version will be loaded on ftwonline.co.za on June 21. CAPTION A vessel similar to – but slightly smaller than – the R300m vessel on order by MBC.