Tersan Shipyard Delays Havila’s Delivery Due to Earthquake Disaster

Turkey’s Tersan shipyard declared a force majeure last week as Turkey continues to struggle with the aftermath of the devastating earthquake. This will cause yet another delay for Norway’s Havila Voyages continuing the year of challenges for the shipping company after the invasion of Ukraine. 

Havila is under contract to the Norwegian government to maintain regular coastal voyages from Bergen north along the coast to Kirkenes. The company's efforts to start service with four ships making the 12-day roundtrip were first delayed by contract issues with their original shipyard and then by the onset of the pandemic. The start-up was further complicated by the sanctions placed against Russian financial institutions. Havila had an agreement with a well-known Russian company GTLK to build the four cruise ships and charter them long-term to the company.

“The devastating earthquake disaster in Turkey and Syria has hit hard, and at the Tersan shipyard a large number of shipyard workers, and many who work with Havila Pollux, have traveled to assist in the disaster areas,” said Bent Martini, managing director of Havila Voyages. “We fully understand the situation Tersan is in as a result of this and have great sympathy for everyone affected after this tragic natural disaster.”

Tersan reported the force majeure on February 14 regarding the completion of the company’s fourth cruise ship, Havila Pollux. The shipyard informed Havila that the delivery of the vessel would be delayed now targeting the end of April 2023. Havila has now scheduled the ship’s maiden voyage for May 27, as they work to get to full capacity before the busy summer season.

This delay comes as Havila continues to wait for the necessary releases from the Irish central bank to complete the transaction to end the nearly year-long struggle revolving around the issues related to the agreements with GTLK. The cruise line had to take its first vessel out of service for a period of time due to issues created with the insurance on the vessel due to the sanctions, while the second ship was delivered only after the shipyard agreed to a bridge loan. Delivery of the third cruise ship has been postponed since December with Havila again reporting delays.

“This is a frustrating situation where we can only follow advice from legal advisers and the conclusions reached by courts and many countries' authorities,” said Martini. “The processes have been more time-consuming than both our advisers and we could have predicted, and we can only wait for a clarification.”

The company announced that it is canceling a further three departures in March from Bergen planned for the third cruise ship, Havila Polaris while it waits for its license application to be approved by the Irish central bank. Only then will it be able to complete the financial transactions to obtain a clear title for the third cruise ship without the chance of future legal actions.

The latest delay comes as the Norwegian government informed Havila that it intended to fine the company for not operating the planned voyages for the Havila Polaris in January. Saying that it is caught in a situation where it can not take delivery of the ship until the formalities are arranged, Havila said it would assess the legality of the liquidated damages planned by the Ministry of Transport.

“We were told a processing time of around 10 working days for the license application, and this deadline has been passed,” said Martini. “We are doing our utmost to become fully operational along the Norwegian coast, which the agreement with the Norwegian authorities entitles us to, but regrettably still have to await clarifications that give us the opportunity to do so in line with current sanction regulations.”