Havila returns to duty as Norway reject sanction waiver
Norwegian Havila Kystruten resumed coastal voyages today using the company’s second ship as he continues to seek a solution to an insurance problem created by sanctions against Russia keeping its first cruise ship off service. The company’s request for a temporary exemption so that it could obtain insurance for its first vessel was rejected by the Norwegian Ministry of Foreign Affairs, forcing the company to cancel an upcoming voyage for its first vessel, the Havila Capella.
Challenges for Havila began in April when the EU included Russian financial institution GTLK in sanctions. The company had an agreement with GTLK and its subsidiaries to build four coastal cruise ships which it would charter and operate under the Norwegian registry. Havila was forced to cancel departures aboard the Havilla Capella because of the sanctions and a loss of the civil liability insurance provided by the Gard on the ship.
Havila received a six-month exemption from Norwegian government sanctions, but the company continued to deal with the lack of insurance on the vessel. They applied for an exemption to allow the ship to be insured, but the company said yesterday the application had been denied. According to Havila, the government has decided that being able to purchase insurance in itself would mean that a property is made available to the registered owner, which in the case of Havila Capella is GTLK.
“As the sanctions are put in place, any insurance payment will not benefit the registered owner of the vessel. In the event of total loss, the other parties will receive the insurance payment,” Havila said while noting his disagreement with the government.” This is very disappointing and means that we still have an unresolved situation for Havila Capellasaid Bent Martini, CEO of Havila.
The company announced that it was canceling a third round trip of the ship which was due to depart on May 15 from Bergen. At the moment, Havila Capella remains out of service with no clear solution to the problem. Havila offered to buy the ship off its charter, but that would also likely be a violation of the sanction because the company would be sending money to a sanctioned institution.
“We will not give up and we will strive to find a possible way out of a very demanding situation. Until we have clarified the room for maneuver that we face, it is difficult to provide more information for the moment,” Martini said.
However, as the company’s second cruise ship has yet to be delivered to GTLK, Turkey’s Tersan Shipyard provided a bridging loan to the company to directly acquire the second cruise ship. Havila is seeking to refinance its cruise operations before taking delivery of the third and fourth ships due for completion later this year.
The second cruise ship, Havila Beaverarrived in Bergen, Norway, last week, and the crew, assisted by the crew of the Havila Capella and suppliers rushed to get the ship ready to take on passenger service. Havila Beaver set off on Tuesday evening for its first round trip along the classic Norwegian coastal route from Bergen to Kirkenes.
Cruise ships are considered to be among the most environmentally friendly ships currently in service. The ship’s propulsion is a combination of natural gas (LNG) and a 6.1 megawatt-hour (MWh) battery, which is said to be the world’s largest battery on a passenger ship. Havila is also planning the future biogas blend to reduce emissions and next month, Havila Beaver will navigate the Geirangerfjord becoming the first vessel to enter the World Heritage Fjord using only its batteries and producing zero emissions.