Germans Receive Guarantees for What Is Left of BSSC

A commercial loan worth of $140 million will be issued by the Export-Import Bank of Japan to Mykolayiv's Okean Shipbuilding Plant. A draft of the corresponding foreign loan agreement has been presented to the Ukrainian Export-Import Bank.

The loan will be used to build a series of ten bulk carriers for Germany's MPC Marine Co.. As Okean Director General Mykola Romaniuk told The Day , a contract worth of $250 million had been signed in April 1997, but in no way can the shipbuilders begin its fulfillment. The Japanese bank had agreed to finance construction, but demanded guarantees from the Ukrainian government, and it has taken Okean almost two years to obtain them. Still, Okean is the only shipbuilding yard to receive such guarantees. Since then, they have been tangled in paperwork and red tape. Initially, the shipyard planned to begin construction in last June but had to put it off.

Deputy Director General Ihor Vakhrushkin states that the shipbuilders will begin construction within one month after the approval of the foreign loan agreement. This contract will provide work for basic industrial facilities for five years. The loan is granted for the same period “at very low interest” and will be used to purchase engines, navigational aids, and electronic equipment. The less science-intensive products like metal, cables, etc., will by supplied by Ukrainian producers.

Incidentally, the first ship under the contract, still not in force, is 67% completed. Previously it was built for the Black Sea Shipping Company, which contracted with Okean for three bulk carriers. BSSC was able to pay only for one ship, after which the contract was canceled due to company's insolvency.