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Expert article 894 Baltic Rim Economies, 21.12.2011 Quarterly Review 5�2011 Svenska Kultuförbunden (the Swedish Culture Society) Swedish Studies at Gdansk University by donating Finnish- Swedish literature to them. A few years ago, Mr Derek Fewster, an expert on Philosophy at Helsinki University was sent over to Gdansk to give some lectures on Finnish-Swedish culture and literature. Poland having had the chairmanship of the EU in 2011, many events were organized in Finland to make Poland, Polish culture and Polish way of life much better known in Finland. Also the Union and many Finnish-Polish Associations organized several events to make today's Poland better known by organizing a series of lectures on Poland; the lecturers were real experts on Poland, such as Professor Matti Klinge, Mr Stefan Widomski, the honorary consul of Poland, and translators of the Polish literature Mrs Päivi Paloposki and Mr Tapani Kärkkäinen. The economy of the Union of the Finnish-Polish Associations is funded by the Ministry of Education and Culture, by membership fees and the advertisement fees received e.g. from those who advertise in our magazine. The Union has not paid staff, all activities are voluntary. 50 I personally think and sincerely hope that the Union of the Finnish-Polish Associations in Finland will keep going strong in the future as well. I firmly believe that the situation will be the same in Poland. Marjukka Mäyry Chairperson of the Union of the Finnish-Polish Associations in Finland Finland � Pan-European Institute � To receive a free copy please register at www.tse.fi/pei �
Expert article 895 Baltic Rim Economies, 21.12.2011 Quarterly Review 5�2011 Maritime transport in winter is necessary for Baltic Sea states By Hans Langh Last winter once again proved without a doubt the importance of maritime transport in wintertime. Ships were stuck in ice and industry was forced to wait for raw materials and explain to customers why their goods were not being delivered on time. There are two strategies for ensuring smooth maritime shipping in wintertime: mobilise more icebreakers in maritime areas or use ships that can successfully move through ice. Finland has chosen a policy whereby icebreaking services are financed with taxable fairway dues. This means that ships that don’t really require icebreaking assistance pay just as much for the service as ships that must be towed by icebreakers from open waters to unloading ports and, once emptied, on to loading ports and then practically to the start of open waters. Fairway dues in 2010 totalled EUR 67.8 million. Some 50 per cent of annual taxable fairway dues are attributed to icebreaking activities alone. A 9.5 per cent increase in taxable fairway dues is being proposed for 2012, the justification for which is the high cost of icebreaking, including towing services, in the Bay of Bothnia. The need for icebreakers would substantially decrease if the ships that carry raw materials for industry were to load new cargo from the same port. An empty ship sailing from port to port travels in small draughts, which means its propeller mostly crushes chunks of ice with a weak thrust. When Finland offers towing services to ships with a weaker engine output at no separate fee, it makes no sense for higherquality, ice-going ships to sail to Finland. For that reason, Finnish industry uses the cheapest possible vessels. The best ice-going ships in Europe sail to St. Petersburg. This also puts Finland in an unusual situation: because of the icebreakers, ships that could very well continue in open fairways without the help of icebreakers are forced to wait. This is because icebreakers are so occupied with towing weak vessels that they would not be able to assist ships travelling in the fairway if the weather conditions suddenly changed, a field of ice broke free and help was needed. The ideal situation would be if the vessels had nearly the same level of ice-going characteristics. The better ice-going vessels would sail in one convoy and weaker vessels in their own. Nowadays, one bad ship causes insurmountable problems for everyone. In my opinion, a vessel should have an engine output and a hull shape that allow it to sail in an open fairway, and it should only require towing in exceptional situations to break through major ice ridges. For example, Langh Ship’s three 6500 dwt vessels that navigate in the Bay of Bothnia – m/s Laura, m/s Hjördis and m/s Marjatta – have an engine output of 5850 kW and two winters ago did not require towing a single time, even though it was a relatively tough winter. Last winter, the vessels in question each required towing on only one occasion after breaking through a difficult ridge of ice. The task of icebreakers should be to assist vessels through difficult barriers – not to tow them from open water to a port. In contrast, Langh Ship’s 1A Super ships – m/s Aila and m/s Linda – which navigated the St. Petersburg–Helsinki– Central Europe route last winter, did not require icebreaking services at all. Those 11500 dwt ships have an engine output of 8400 kW. An old rule of thumb is that a good ice-going vessel should have one horsepower per dtw. Free towing assistance has led to a situation whereby effective ice-going vessels have largely left the Bay of Bothnia. The vessels that remain have a weak engine output and at the same time represent an environmental risk if they encounter problems in difficult ice conditions. Only about 18 per cent of the industrial products exported from Finland are shipped on Finnish vessels, and the Finnish 51 fleet will inevitably require renewal, as the average age of our merchant fleet is among the highest in Europe, at 17.5 years. Icebreakers require huge investments from the state. The price for one medium icebreaker exceeds EUR 100 million. If the goal is to smoothly handle increasing maritime transport, such as mining industry transports, with the current low-powered ships, several new icebreakers will be required. The stricter requirements laid down by the International Maritime Organisation (IMO) as of 2015 and 2016 set pressures of their own on the renewal of vessels. These requirements involve restrictions on sulphur and nitrogen oxide emissions, ballast water cleaning, purification of cargo-hold cleaning water, and reducing nitrogen and phosphorous emissions. It is important to invest in new ships that fulfil the future requirements now; because modifying ships that are too old is unprofitable and operating old ships on low-emission diesel fuel will be too costly for all parties and will destroy the competitiveness of industry in the Baltic Sea area. In this situation, we should ensure that new ships can sail properly in ice too and that we will not succumb to equipping our future ships with insufficient power under the pretext of environmental requirements. Icebreakers with a high engine output towing vessels with a low output creates a combination that causes considerable contamination to environmentally sensitive maritime areas of the North. This kind of combination causes considerably more emissions in relation to the volumes being shipped than, for example, a convoy of five ice-going vessels sailing behind an icebreaker. The stricter regulations can be turned into a competitive advantage for maritime transport through innovative technological and political solutions. At the moment, it is extremely difficult and costly to secure financing for new cargo vessels. Banks consider the shipping business to be high risk and, in addition to the Euribor, require very high margins. The requirements of the Basel II accord also raise the interest margins. The Baltic Sea states could, for example, within the framework already approved by the EU, grant reasonably priced guarantees, which would enable investments in new vessels. Industry and merchant shipping must together find an ideal solution to future challenges in order to safeguard the competitiveness of industry in the Baltic Sea region. Hans Langh Maritime Counsellor, Honorary Honorary Doctorate in Economic Sciences Founder and Managing Director Oy Langh Ship Ab Finland � Pan-European Institute � To receive a free copy please register at www.tse.fi/pei �
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