Ukrainian Danube Shipping Company Adds 60 Vessels To Its Fleet

27 December 2016 14:30

The transfer of barges of the "Europe-IIB" type to the Ukrainian Danube Shipping Company (UDP) was completed in Vienna (Austria) on 13 December.

According to UDP, the barges UDP-1601-1630 and UDP-1900-1930 of the "Europe-IIB" type were built at a shipyard in Linz (Austria), and they are intended for transportation of general and bulk cargoes. The barges have a length of 76.5 meters, a width of 11 meters, a draft of 2.7 meters, and a load capacity of 1,717 tons.

The contract for construction of the barges was concluded during the Soviet era. The Sovkomflot company concluded the contract with the Austrian bank BAWAG Leasing GmbH in 1989. UDP inherited the contract after the collapse of the Soviet Union.

In accordance with the terms of the contract, an advance payment equal to 15% of the cost of the barges was made and the shipping company was to pay the remainder with interest according to a set schedule. However, the company often failed to meet this schedule over a period of more than 25 years and completely stopped making payments because of financial problems related of the United Nations embargo against Yugoslavia, military operations in that country, and destruction of bridges on River Danube.

As of December 2014, the remainder of the debt for construction of the barges amounted to more than EUR 7 million and the interest amounted to about EUR 2 million.

In 2015, after lengthy negotiations, the Ukrainian Danube Shipping Company managed to reach agreement with BAWAG Leasing GmbH and Austria’s Österreichische Kontrollbank AG (OeKB) on reduction of the debt by 90% to EUR 1.5 million, subject to completion of payment by 30 November 2016 in accordance with the agreed schedule. The debt was paid in full on 24 November this year, and the transfer of the 60 barges to UDP was notarized in Vienna on 13 December. 

According to the Ukrainian Danube Shipping Company, the payment of the long-standing credit opens opportunities for new export credit lines for the company, with the support of Austria.

Before the transfer of the 60 vessels, the Ukrainian Danube Shipping Company had a fleet of 75 self-propelled vessels and 245 non-propelled river vessels, 7 sea-going vessels with deadweight tons of 3,300-4,050 tons, and 4 passenger vessels. In the 1980s, the company’s transport fleet consisted of more than 1,000 vessels with a total of about 1 million deadweight tons.