Croatian operator Jadrolinija has started concept and preliminary design work for a new ferry, which will be built as part of a fleet renewal programme over the next few years.
According to Alan Klanac, chief executive and president of Jadrolinija, the company started the process to acquire a newbuild about a year ago with a view to improving services between the major islands off Croatia’s coast, both to connect them efficiently and to secure year-round operations. Some of the vessels serving the islands are aging and face capacity problems in the summer months. “In winter, the vessels can provide services efficiently, but in summer they are simply too small,” he says.
Klanac explains that Jadrolinija received two design proposals for the newbuild – one from Deltamarin in Finland, and the other from Remontowa Shipbuilding in Poland. The latter secured the contract, starting work in September 2016. When completed, the initial design work will form the basis of a formal tender for the final construction agreement. It’s too early to say which company will win the work.
Jadrolinija’s 230-metre-long vessel will have four diesel-powered engines and is intended to accommodate 1,500-1,700 passengers and around 220 vehicles, based on a proven design for a day ferry. There will be no cabins onboard because the ferry will be geared to provide day sailings of up to five or six hours. The final set of design drawings are expected this summer, with a construction tender likely to be offered either late this year or early 2018. The vessel will be classed by the Croatian Register of Shipping, a long-standing Jadrolinija partner and member of the International Association of Classification Societies.
In the past, Jadrolinija has predominantly placed orders at Croatian yards and, because the line has long-term relationships with these yards and there is local capacity available, they will be the initial target for the newbuild. However, Klanac says, Remontowa is also an option – it has a good track record for building similar type vessels – and the tender will be Europe-wide with a level playing field for everyone.
Commenting on yard availability, Klanac says there has been quite a clear differentiation in the past 10 years between the yards concerned with building cruise ships and those concentrating on the ferry and ro-pax market. This, he says, is a plus for the ferry market. Cruise ships are increasing in size and there is a new adventure cruise ship segment, but the number being built at present is insufficient to endanger capacity to build new ferries. “The ferry and ro-pax markets require new tonnage,” Klanac explains. “There has been quite a big shortage for many years and the market has turned, so most companies are experiencing positive effects.”
In general, the Adriatic is seeing continuing business growth, which is good for Jadrolinija. “It is good to see 5% average growth in the past five years, so if you’re well established in the market and provide a good service, you have good prospects to invest and secure a better future,” comments Klanac, adding that tourism has been a key driver and now the industry is looking to extend Croatia’s season from Easter to October, and to attract more young travellers and cruise passengers, as well as the traditional family groups.
No decisions have been taken about the interior design of the newbuilds as yet. Jadrolinija has been working closely with local companies over the past decade and a lot depends on which yard wins the building contract, However, recent newbuild work has seen the interior and shipbuilding contracts split.
Jadrolinija has also recently refurbished interiors on four of its high-speed craft and is planning to replace three passenger ships that are used for specific local routes to small islands. Dalmont in Kraljevica, Croatia will start building one vessel this year, with options for two more. More orders are expected in the next year and the company is also considering catamaran newbuilds. Overall, the line aims to launch 20 to 23 new vessels in the next 10 years.
With a 50-strong fleet, continuous investment is necessary, Klanac stresses. Funding in the past few years has come from the company’s own resources, partly in the form of loans and partly in cash generated by the business. Going forward, the company may consider alternative funding.
“We experience quite high interest from banks to finance our projects,” says Klanac. On the one hand, he adds, Jadrolinija shares some of the legal risk issues with other shipping companies, but on the other, revenue comes from the tourism market and the general economy. Klanac also explains that ferry operations are perceived differently by some banks. His company has a strong balance sheet, good debt levels and long-term contracts with the government, which boost its financial position and put it in a good position when seeking to raise funds.
Meeting environmental regulation deadlines is also no problem for Jadrolinija – its fleet burns clean diesel with less than 0.1% sulphur. The company’s most recent vessels also operate more efficiently and going forward, it will consider more efficient designs and the use of fuels like LNG – there are plans for a large LNG terminal in Croatia. For short routes, the company is exploring hybrid technology and diesel-electric propulsion is installed on four vessels. “Going to a diesel-electric hybrid would be just another step,” Klanac says.
Outside of Croatia, Jadrolinija has signed a new deal with ferry line Barska Plovidba, which will benefit tourists and locals in both Montenegro and Bari, Italy. The company has taken over the service of Barska’s fleet and, happy with the passenger traffic, Klanac says it hopes to make the service an annual one, provided the numbers add up. “We plan to open new lines and expand our international service,” he says. “But right now, the plan is to strengthen the footprint in the Adriatic.”
This October, Klanac will also host the Interferry conference in Split, Croatia, as part of his role as the organisation’s president. “We have a large number of keynote speakers who will provide satisfaction, both on commercial- and safety-related issues,” he says. “We have a great social programme planned so I’d like to see all my friends in this business coming to Croatia and enjoying the Interferry 2017 conference with us.”