FUTURE UNCERTAIN FOR OUTDATED FIJI SHIPYARD

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By Elenoa Baselala

SUVA, Fiji (Islands Business Magazine, Jul 2007) - So, what would become of the state-owned Fiji Ships and Heavy Industries (FSHI)?

It seems the change of ownership and name of the almost six-decade old ship building facility has failed to brighten its future.

Now, it needs at least a US$78 million injection of funds to enable it to improve its facilities so it can start building world-class ships it is capable of.

Chairman Leo Smith believes the company's strength lies in shipbuilding, although in the last decade this has never been a feasible business for the state-owned entity.

Smith says the company was on the verge of rolling out its refurbishment plans with an overseas donor when the December 5 takeover happened.

Now, it is unclear where the company is heading.

Already, its workers are taking a 40 percent pay cut, and working only three days a week.

Never having built a ship since the Reef Endeavour in the late 1990s, the company has been concentrating on repairing ships only.

But with Industrial and Marine Engineering Limited and South Sea Slipway companies operating their own slipways, FSHI is struggling to keep afloat.

Existing problems

One of the main reasons the company has been suffering is due to its age-old facilities.

"We have been expected to make profits from a facility that is out of date," Smith says.

A recent feasibility study on FSHI said its ship repairing ability was tight and if its out-of-date infrastructures were used at the same time, there would be huge pressures on the dockyard. The dockyard, which is equipped with three slipways-200 tonnes, 500 tonnes and 1000 tonnes-was built in 1952.

"Now only ships weighing 800 tonnes and below can be repaired on its 1000-tonne slipway, which fails to meet the requirements of repairing ships."

It is recommended the existing slipways must be corrected and extended to meet the requirements of larger ships.

The refurbishment should enable the slipways to slip 255 ships of up to 500 tonnes, 128 ships of 1000 tonnes, and 42 ships of 2000 tonnes to 3000 tonnes.

Currently, FSHI is only repairing cruise ships; roll on roll off vessels and fishing vessels.

Potential

"There is great potential out there in ship building," Smith says.

"We were at one time building world-class vessels like the Reef Endeavour and we could do it again."

But apart from its financial woes, Smith says FSHI has also lost its expertise when the company was privatised in 1996 and sold in 1999.

Since 2001, the government has spent over $11million buying back the company and injecting funds to refurbish the shipyard.

"But we are working with the Fiji Institute of Technology to encourage courses on shipbuilding.

"There's no sense of us having a development plan and then all our ship builders have gone overseas or retired.

"The government needs to revitalise ship building in Fiji but we must revitalise our facilities.

"We have modernised fleets now but our slipway is obsolete and outdated, so we can not meet their requirements," Smith says.

The US$78 million, he adds, will make the government slipway a one-stop shop.

"We need to spend money to make money," Smith says.

"With the refurbishment, we should be able to berth five ships at any one time. Overseas governments are ready to help us but this will depend on the current political situation."

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