Sunday, August 7th, 2022
Time for a proper recap of activities, I will focus on 2 ships that have been marking the Greek scene, both with their absence.
- Hottest ship of the summer? Well surely, the Olympus. So let me try and decipher for you what has happened here, I realize that for someone non-Greek trying to make sense of it all is in the sphere of the impossible. As you have perhaps seen me report in this forum, in a scandalous manner, the owners of the Olympus had taken over the Kasos - Karpathos subsidised service. The scandal is concentrated in the fact that while Sea Speed Lines had submitted the lowest bid, everyone in the market knew that they were in extremely dire straits financially, having saved the Olympus from being auctioned off only weeks before winning the bid, by the skin of their teeth. There were no qualitative criteria therefore in the tender. Opinions are divided as to what type of connections to the government Sea Speed Lines have. I tend to believe they did have some good rapport, in Greece you don't just turn up and win a subsidized service tender.
In the weeks that lead to the supposed take over of the service from the Prevelis, it became clear that something was not going right. The ship was moved between a couple of repair docks, remaining dark and silent during the night. Turns out of course, her owners could not afford to reactivate her, there was no cash in the coffers and guess what, sub-contractors like to be paid in advance when they know the background of the company. The start of the service fell back by a couple of weeks, a period during which the owners managed to get their hands on some cash. Rumour has it that they secured a bank loan for working capital on the back of future income from the subsidy they were awarded. If true, i'm suspecting a State owned bank is involved. In a private bank, the people who approved this loan would have been kicked out of the door by now.
Using this capital the owners started to make last-minute repairs and maintenance, while at the same time no crew was being signed on. The ship was towed to Neorion, Syros for drydocking for the simple reason that for them it was cheaper to tow, rather than employ people and start accruing wage bills. The drydock took place and the ship went back to Piraeus where a few days before the official start date in early July, the owners officially started to sign on crew. Apparently they were desperate and managed to sign on a hap-hazard crew using the help of the Marine Employment Office of the Coast Guard. Of course before the service was to start, the ship had to be inspected by the relevant department of the Coast Guard. The Olympus signaled readiness for inspection only on the morning the ship was supposed to commence service and with the Prevelis already at the repair yard.
Normally in these situations, i.e. when a ship of the company which is favoured by the Ministry is being inspected, the inspectors of the Coast Guard are sure to be lenient in their inspections. Having that in mind, the ship was in such a terrible shape that a total of allegedly 26 deficiencies were found, most of them detainable. Consequently the sailing which ought to have taken place at 1830 on that same evening, never materialised. This created a whole chain reaction from people whose holidays were ruined as well as from local communities who saw the tourist season being destroyed. The pressure was such that the Minister himself had to spring to action, already from the same afternoon.
Long story short, and as official documentation has now started to appear, the Ministry declared Sea Speed Lines as not being able to comply with the requisites of the tender and summarily disqualified them, awarding the service back to the Prevelis with more than double the fee the ship was getting. Within one week normal services have resumed and the Prevelis is looking good for the time being. All this of course took place because the Ministry does not want to provide a permanent solution and insentivise the owners to provide a new and sustainable ship for the long run. Instead, they prefer the same process to take place every year. Why is that? Because for them the point is not providing a service to the islanders but satisfying their electoral clientele. The yearly process brings with it favours to be granted, re-sharing the pie, commissions and in general creates the space for under the table dealings. There are many mouths to be fed and many an extra income to be found. If they were to award the service to a newbuilding for the next 20 years, there goes the Ministry's bargaining power for the next 20 years.
- The second ship which is shining through her absence is the Smyrna, or Smyrna di Levante or Smyrna di Subsidy as I like to call her. Let's again take things from the beginning. When the ship arrived in Greece 3 years ago(yes, it's really been that long. She was 42 when she arrived, she is now 45), in classic Levante Ferries' fanfare we were let know by no uncertain terms that the ship was inspiring to commence a service between Thessaloniki and Izmir. During these 3 years we have been bombarded by videos, instagram posts and press with the amazing job which was being carried out and so on and so forth. Those of you into social media will surely recall. By the rythm things are moving now on this ship, the real story is that apart from some external jobs, the ship in the inside had really been a construction site. Why else would her owners be employing so many people for 16 hours per day(allegedly) over the last 2 months in order to finish up her conversion?
That's for the ship itself and the hay that Levante has been feeding people. Not this forum of course. Because questions were being raised since a long time ago, such as for example if there's any agreement with Turkish road hauliers who would support the venture. Well turns out all Levante's effort in this front were unsuccessfull, with the Turkish road hauliers making clear that they will not be committing volume, perhaps due to the fact that Levante is Greek, i may add. Suddenly a couple of months ago, reports started surfacing about the fact that Levante wanted to add the port of Mytilene to the service, something which does not make much sense in that it's an extra deviation and fuel cost.
But this was the coup d' etat. Because this is why and how Levante are hoping to receive a staggering EUR 94k per sailing, subsidy. The theory is that the ship is sailing to Izmir but also is calling Mytilene so this being a not so popular route, why don't we as the Ministry subsidize our favourite children? Chances are therefore that after a while Izmir will be dropped altogether and the ship will be sailing from Thessaloniki to Mytilene only in a subsidized service. I remind you that during winter months the Blue Star Myconos/Diagoras are receiving a subsidy for the same service, although in the summer the ships were allowed to skip Thessaloniki and call Kavala instead. And -oh by the way- Seajets is also receiving a subsidy to call Mytilene from Thessaloniki once a week. So things are very well in Greece and healthy entrepreneurs are being rewarded for their commercial spirit. You buy a 42-year old ship with no risk, if you are a favourite son of the government, they will create a subsidy for you. Needless to say, the tender which was put out in public by the tender is a photographic one and requires in detail the specific characteristics of the Smyrna, just in case someone else who is not a favourite son, has the idea to steal the food from the horse's mouth. The best part is the requirement for a ship of 150m long. On the dot. Why for example a 145m cannot do the job?
I will stop here before I say something I will regret, I feel my guts turning upside down just by writing of these stories. Think now of the earlier story about the Olympus, I believe you can recognise the commonalities in how the system works. The Ministry's primary duty is to keep all the bargaining chips and spend the money as they see fit. This is the regulatory framework in Greek ferry shipping.
Take care and enjoy the holidays for those of you who have not had any,
Rumors are that ANEK Lines will be put up for sale by Piraeus Bank in the (very) near future. Any idea if Attica Group will add ANEK Lines as a whole into their shipping group of companies?
Also, what would that mean for the Prevelis? Would they be able to get the new contract for the Karpathos route?