A Practical Guide to Yard Delivery of New Ship

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A Guide for Seafarers, Shipowners and Ship Managers

A Practical Guide to Yard Delivery of New Ship

www.marineinsight.com

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Authors

Bimal Roy / Anish Wankhede Editor

Abhishek Bhanawat / Raunek Kantharia Graphic Design

Swapna Lekshmanan

Table of Content

A Practical Guide to Yard Delivery of New Ship

Introduction

The Contract: Shipbuilder & Purchaser Responsibility of Owner/ Ship Manager

Responsibility of Takeover Team

Surveys, Certifications & Requirements Sea Trials

Handing Over and First Voyage

1 2 3 4 5 6 7

o

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About Marine Insight

Since 2010, Marine Insight has been educating and guiding people on various aspects of shipping and maritime

industry. With the main aim of creating awareness about the importance of the shipping industry to the world and helping its professionals by providing digital and easy-to- access information, Marine Insight is backed by a team of seafarers and ex-mariners, who have a goal to give back to the industry, which has made them what they're today.

Marine Insight©

“A Practical Guide To Yard Delivery Of New Ship”

Publication date: Jan ’2017

reproduced, stored in a retrieval system, transmitted or distributed in any form or means, without prior written permission of the publisher.

NOTICE OF LIABILITY

The authors and editors have made every effort possible to ensure the accuracy of the information provided in the book. Neither the authors and Marine Insight, nor editors or distributors, will be held liable for any damages caused either directly or indirectly by the instructions contained in this book, or the equipment, tools, or methods described herein.

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Introduction

CHAPTER 1

Introduction Birth of a Ship

Ship Construction Stages

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checks and certifications before the vessel gets delivered from the yard.

This guide is an effort to simplify the complete process of Yard Delivery not only for the shipowner/ purchaser but also for the seafarers, who today have to follow several stringent regulations at port and sea. The yard delivery process includes many such planned steps along with exhaustive paperwork.

T

he use of advanced technology, latest concepts, codes, conventions, and regulations have kept the shipping industry dynamic and ever-changing.

Among these, shipowners, operators and floating staff are responsible for compliance and updates, keeping ships and shipping industry abreast with the same.

As the shipping industry constantly upgrades itself with new technologically advanced ships constructed and added into a company’s fleet, the initial process of booking a shipyard and delivering a ship has a set of procedures to ensure the ship received from the yard comes as promised by the manufacturer and does not have any shortcoming or problem.

It’s the joint responsibility of ship’s staff, owners, classification society, ship operators and their superintendents to takeover the ship from the yard, monitor, and conduct various tests,

Yard Delivery Team: Photo by - Jose Mateo S. Halagueña

Yard Delivery Procedure l 4.

3. l Marine Insight

Introduction

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The decision of a shipowner/ purchaser to order new ships from a shipyard depends on the following factors:

Once the decision has been taken to purchase a particular type and size of a ship, a reputed shipyard is selected to complete the construction and timely delivery of the ship to the

purchaser under a contract between them.

Following are the main phases in the ship construction process and the average time taken to achieve the same.

• Company growth in one type of fleet or expansion in multiple fleet type

• The tonnage requirements for a particular type of trade and size of vessel according to the same

• Current and future shipping trade scenario and projection of global business

Yard Delivery Procedure l 6.

5. l Marine Insight

Birth of a Ship

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1. Signing of Contract & Designing: Contract or agreement between the owner and the shipyard with respect to specifications and time required for a particular ship is as critical as it is for the purchaser to safeguard the interest of the shipping company in case of defects or shortcomings in the new built ship post delivery. This topic is discussed in detail in the 2nd chapter.

Designing of ship is a separate area with its own time

requirement (it varies depending on the latest technological features or methods required for the ship).

2. Block Formation: This phase comprises of construction of various blocks using steel plates and beams. In this stage, all the piping systems are also fabricated. The fabrication goes through 500 to 600 inspections before moving to next phase.

3. Block and Machinery Fixing: Keel is laid in the dock and blocks are joined together as per the yard crane

7. l Marine Insight Yard Delivery Procedure l 8.

capacity. Provision for fitting important deck and engine room machinery is made in the required blocks.

4. Erection: In this phase, various blocks are brought and assembled together. All the important machinery

systems (engines, deck winches, steering gear, propeller etc.) are also erected. The important ship particulars (LOA. Depth, draft, level of keel etc.) are then measured.

5. Commissioning: This is the most exhaustive phase of all, which includes hull painting, class surveys, inspections, supply of provision, bridge equipment installation, sea trails etc.

Ship construction: Photo by Martin Simon

Ship Construction Stages

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Factors that help in selecting a Shipyard:

Even after shortlisting a shipyard, the owner must look into the following matters to ensure that the choice made is right in terms of reputation of the shipyard and timely delivery of the ship:

“B y carefully selecting the shipyard, structuring the contract to avoid conflicts, instituting a rigorous progress monitoring system, and developing strict procedures to assure timely approvals and documentation, the shipowner will greatly improve his chances of being able to settle changes and disputes with the shipyard in an equitable manner.”

• Physical characteristics

• Technical capabilities and experience

• Order book and employment

• Location

• Ability to assist financing

• Reputation and references

• Quality information

• Yard standard details

• Current order book

• Financial statement and bank reference

• Management plan

• Technical plan

• Major events schedule

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The Contract

CHAPTER 2

Plans, Drawings and Specifications Classifications, Regulations and Registration

Warranties and Limitations Extras, Additional Services and Alterations

Insurance and Taxes

Completion Date and Payment

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A shipbuilding contract can be specifically drafted as per owner or shipbuilder’s standard format or industry standards.

Following are the most important points of a shipbuilding contract explained in brief:

The shipbuilding process runs on a blueprint, which is agreed by the shipowner and the shipyard on the type/kind of ship to be constructed. It mainly consists of plans, drawings, and specifications along with the tentative schedule of completion.

It is very important to go through each document and understand the clauses attached to them. A shipowner or purchaser can always take help of a professional naval architect or an experienced surveyor to understand these documents in depth.

The other important aspect of going through various

documents is to understand that shipbuilder is fulfilling the minimum standard criteria of the flag state (which the shipowner will opt for).

A

contractual agreement between two parties is an

exhaustive document, which ideally should contain all the information of the agreement, payment, failure,

consequences etc. Since money involved in shipbuilding is huge, it is imperative for the owner to know and understand the basic requirements of the contents of the agreement that is with the shipbuilder, even when a reputed law firm or a maritime/contractual lawyer is hired for this purpose.

Plans, Drawings and Specifications:

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The contract will also list that the vessel will be complying with all the applicable rules, regulations and requirements of the regulatory bodies. All such rules, regulations, and

requirements shall be complied without any conditions/

recommendations.

Classification, Regulations and Registration: It is also important to understand whether the payment and fees involved with respect to the class or regulatory bodies, regulations and requirements shall be accounted by the shipbuilder or not.

Normally the shipbuilder provides, delivers, and pays for all the certificates necessary for the approval of the vessel, and it should be clearly mentioned in the contract for clarification purpose that all documents reasonably required by the

purchaser are a requirement for the registration of the vessel in the preferred flag state.

The contract will also specify (and it is practiced in general) that buyer/ purchaser will bear all the expenses of registering the vessel in the preferred flag state.

Forums

&

Organizations

Classification

& Flag State

IMO ^“C

lassification Societies, acting as alter ego to flag states,

work to meet the prescribed duties laid down under Article 94 of UNCLOS 1982.”

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The buying and selling market runs on 3 important things:

The shipowner will choose a shipyard that can provide a quality product at a compatible price. The time factor is an important parameter as the business planning of the owner will be dependent on this critical factor.

Warranties in writing guarantee that the shipbuilder will repair or replace faulty workmanship or material for a set period of time.

If the shipowner claims on the manufacturer's warranty and the products are replaced, he/she may still receive a new warranty on the replaced products.

Warranties and Limitations: It is important that the contract includes all the services, designs and machine parameters such as speed, fuel

consumption, length, hold capacity, tonnage etc., which the shipbuilder will warrant. Since the breach of a warranty usually entitles the injured party to damages, it can be problematic if a particular design characteristic, which is of great importance to a purchaser, is not included in the warrant.

A well thought contract would ensure that the damages are agreed to ahead of time on a sliding scale with respect to the degree of deviation from the specifications.

• Quality and pricing

• Availability

• Warranty

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Following are the points which can be included in the contract for purchaser’s legal rights:

• Indicate who will bear the cost of bringing the ship to shipyard if the ship got stranded due to breakdown in a distant location

• Indicate if the shipyard is willing to bear the cost of repair or to grant an allowance to owner if the repair is taking place in different ship repair yard

• Check if the shipbuilders included to limit their liability with respect to equipment manufactured by others, unless the failure of that equipment was caused by improper installation by the builder

• In the case of a builder having to actually enforce a warranty for the benefit of a purchaser, the contract should state who will pay the total expenses of such activities

• In some cases, the manufacturer will allow its warranty to flow through to the purchaser and in other cases, the warranty must be assigned or enforced by the builder for the benefit of the purchaser

• For expensive items, the question of transferability of warranties should be reviewed ahead of time with the manufacturer before a commitment is made to purchase the item

Since the cost of repairs is often quite high at remote locations, these provisions are not always satisfactory to the purchaser.

Most shipbuilding contracts also contain a clause excluding liability for indirect damages and consequential losses. From the perspective of the shipbuilder (and his insurers), this is a very important provision.

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The clarification for the payment or cost of an extra item, service or any alteration done while the ship is in shipyard, is an important point which should be clearly written in the contract.

Extras, Additional Services and Alterations: Following points must be clarified in the contract:

• If the shipyard has provided any additional item during the construction of vessel, contract should be clear enough to understand if this extra item will be priced additionally out of the pocket of the purchaser or it will be treated as under fixed price of the contract

• For the benefit of purchaser and builder, there should be a clause in the agreement to continue the work in a disputed situation agreeing to sort out the problem at a later time by either arbitration or litigation

• If the shipyard does not have such an agreement and the purchaser refuses to make an agreement at the time the dispute arises, the shipyard may lose its right to later claim the item as an extra, even if it does the work under protest

• Hence from a shipyard’s perspective, it is advisable to have a clause that allows disputes over use of an extra item, which can later be resolved by a way of arbitration

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after completion of the project

• Contract should clearly indicate mode, amount or rate applicable for payment when any alteration is required for a system or part of the vessel apart from the original decided plans, drawings and speciﬁcations. It should cover the extended time to complete the alteration work with penalties, if any, and offhire charges

• For contracts stating that extras are to be paid on a “cost plus” basis, it is useful to stipulate whether this includes any cost for items such as overhead and labor cost, and what the mark up will be on materials

• Contract should mention if both the parties decide to litigate or arbitrate the value of an extra item. A detailed time record should be kept for each worker that allows the shipyard to identify and quantify work done as extras.

Apart from this, the materials and other items used to perform the “extra” work must be recorded

• It is important that the contract clearly mentions who will be authorized to order for extra work and items as the shipbuilding process in the shipyard will be under inspection from surveyor and classification bodies, who may order such extra work. If it is not mentioned in the contract, a letter of authorization should be provided by the owner authorizing surveyor, or class representative to order any extra work or item which will benefit the existing building process

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• It may happen that the bigger sections/ parts of the ship are outsourced by the builder and agreed to be made in a low cost country by the buyer to reduce the overall

shipbuilding cost. In such cases, the shipbuilder shall remain fully liable for the due performance of such work as if done by the builder at the builder's yard and the contract should clearly clarify such point

Any opinion or request made by the buyer entails no alteration of the builder's obligation and liability under the contract.

Except as otherwise stipulated in the specifications and the

"Maker's List" or agreed in writing, the builder may, without interference from the buyer, freely choose its subcontractors, but the builder shall in ample time notify the buyer in writing before placing major orders for equipment or services with subcontractors, and shall give reasonable consideration to buyer's request.

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Insurance and Taxes: the shipbuilder is tied in, before going into a contract with the shipbuilder. The contract will include the insurance policy of the shipbuilder and all the benefits the shipbuilder and the buyer will have in case of any mishap during the time of ship construction.

The contract should also indicate the liability of the

shipbuilder if there is any damage to the ship during sea trials out at sea.

It is best to have the shipyard review any proposed provisions regarding insurance coverage with its broker prior to entering any contract. Otherwise, it may find itself unable to obtain the type of coverage it contractually bound itself to provide.

In general, till the handing over of the ship to the owner is done, the shipbuilder will bear the risk of any loss or damage to the vessel, materials, parts, machinery, and equipment under the insurance policy.

Following are some important points which need to be

Insurance

It is an important feature of any new shipbuilding order. It needs to be understood by the buyer what insurance policy

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checked in the contract in terms of insurance:

• Insurance should clearly describe who will pay the insurance company for the policy taken for the new ship

• It should clearly mention whether the policy includes the supplies provided by the buyer to shipbuilder

• It should have clear mention of underwriters acceptable to the buyer on customary "All Risk"

terms

• The insurance must contain the necessary fire and transport insurance of material and equipment which the builder will procure from subcontractors

• It should clearly mention if the builder is obliged/

not obliged to insure the transport of buyer's supplies

• It is to be clarified if the insurance covers the

amount to reorder the buyer supplies in case of any mishap

• The insurance policy paper should be in the joint name of builder and the buyer

• It has to be clarified that builder will not raise any demand for shipyard losses other than those related to the buyer’s constructed ship

• The proceeds recovered under the insurance

policies shall be applied to repairs satisfactory to the class and regulatory bodies, and the buyer shall accept the vessel under the contract if completed thereafter in compliance with the contract

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Taxes

Unless a purchaser qualifies for some exemption, both provincial and federal sales tax is payable upon the purchase of a new ship and it will entirely depend on the country’s local taxation law.

Apart from adhering to the local tax law, the contract should also specify whether:

• The builder shall bear and pay all the taxes as per the country of building in accordance with the execution and completion of contract

• The buyer’s supplies for building the ship may also be exposed to local taxation which should be clarified in the contract. Normally the buyer will bear this cost

• The buyer shall bear and pay all taxes and duties imposed outside the country of the builder in connection with the execution and/or performance of the contract, except for taxes and duties imposed upon those items to be procured by the builder for the construction of the vessel

• Any tax benefits or exemptions should be computed while calculating total taxes applicable and appropriately

provided to the buyers or shipbuilders as stated in local tax laws

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Completion date

A shipyard works under the local laws of the country, which will have its calendar of holidays and its own labor union.

It may happen that the shipyard will not operate due to various reasons, which may cause delay in the project completion time.

The contract should include the date of completion and if the buyer’s requirement insists the importance of completion date, it is recommended to include a late completion date and penalties, if any.

If it is important for a purchaser to have a ship completed by a certain date, it is advised to include a clause of liquidated damages in the contract, specifying the per diem penalty for late delivery.

If this clause is demanded in the contract, the shipyard will normally exchange it for a clause bonus for early delivery.

Completion Date and Payment: Although shipyards are generally very reluctant to allow a purchaser to terminate a contract for late delivery, they will often agree to a provision allowing the purchaser to take

possession of the vessel (after reasonable notice of its intention to do so) and have it completed by another shipyard.

Such provisions will also usually reserve the right of the

purchaser to make a claim against the original shipbuilder for the extra costs associated with having the ship completed by another yard.

Delivery Celebration - Photo by –Yasir Elfadil

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Payment

The contract should have following details to make the payment process smooth without any friction and litigation:

• Total contract price in specified currency: the contract should mention the total agreed price from both the parties and the currency in which the payment will be done

• Installments and method of payment: Various

installments with amount, which need to be paid by the buyer at regular intervals of time

• Notice of the installments payable on delivery and acceptance shall include notice of adjustments, if any

• A refund guarantee by the builder for the installment paid by the buyer in case of cancellation of contract by the builder

• Clause for retaining the vessel if buyer does not make the payment or to deliver the vessel under bank guarantee of the payment from the buyer

• Clause for handing over of the vessel in time if the builder is unable to process the final account at the time of

delivery. The costing should be settled under bank guarantee

Important examples of Payment Dispute Claims (from real contracts):

“I

n the event of any dispute concerning the payment on delivery of the vessel, including the question of the buyer's right to offset any claim it may have, the buyer may be paying the entire amount demanded by the builder, who is required to provide a bank guarantee or other security satisfactory to the buyer for the disputed amount. The builder cannot in such case refuse to deliver the vessel.”

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If the builder does not wish to issue security for the disputed part of the claim, the buyer is entitled to take delivery of the

vessel against payment of the undisputed amount and provide a bank guarantee or other security satisfactory to the builder for the disputed part of the claim. The costs of security shall be shared proportionately between the parties according to the outcome of the dispute.

If on or before the delivery and acceptance of the vessel, the builder is declared bankrupt or enters into a fund or a formal composition arrangement or moratorium, or otherwise proves to be in such a financial position that it is likely to be unable to perform its obligations during the guarantee period, then the buyer may demand that the builder shall provide satisfactory security for the performance of such guaranteed obligations, limited to 1% of the original contract price. On failing such guarantee, the buyer is entitled to deposit the equivalent amount in an escrow account in the joint name of the builder and the buyer, and to deduct this amount from the installment to be paid on delivery and acceptance of the vessel.

The ship builder may also require an alteration of the payment schedule so as to allow for early payment for extras.

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Responsibility Of Owner / Ship Manager

CHAPTER 3

Selection of Flag State Selection of Classification Society

Selection of Takeover Crew Arrangement for Surveys

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T

he selection of flag state is an important decision for the owner to ensure his business gets a positive response from the market.

There are multiple flag state options available and the owner can choose the one, which suffices her/his financial as well as statutory requirements, considering the flag state accepts the type of ship as some flag states have eligibility criteria in terms of ship type and age (applicable for resale ship).

Following are some important points to be considered while choosing and registering the ship to a flag state:

• Check if the name of the vessel that the owner wants is available with the flag administration as same name cannot be used under one flag

• Check if the ship is fulfilling the eligibility criteria, in terms of type of ship or age (NA to new build)

* Pro Tip: While the ship is under construction or even before ordering the ship, the desired flag state can be contacted to reserve the name of the ship; some may ask for a reservation fee.

Panama Flag Vessel: Photo by –Ishu Tiwari

Selection of Flag State:

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Classification societies are independent commercial

organisations, which work in conjunction with the shipyards, shipowners, ﬂag state authorities and insurance companies to ensure that ship is constructed and certiﬁed as per the

minimum requirements laid down by IMO.

It can be said that the most important objective of a

classification society is to ensure the safety of life and property at sea by following a definite protocol for technical standards while the ship is being constructed or plying at high seas, or for all the businesses related to shipping.

As per the IACS (International Association of Classification Society), the main functions of a Classification society are:

• A technical review of the design plans and related

documents for a new vessel to verify compliance with the applicable rules and regulations

Selection of Classification Society:

• If the owner has a preference for selection of the classification society, check with the flag state if the desired classification society is on the list of approved societies for the concerned flag

• For selecting a flag state, the cost factor will comprise of initial cost of registration, continuing annual cost of registration and cost of compliance with various regulations of flag state

• The buyer must thoroughly understand and ensure that flag state regulations are in line with important Maritime Regulations such as SOLAS, MARPOL etc. and has a good record of enforcing all the regulations

• The buyer must ensure that the country, which the flag state represents, is politically stable

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• Attendance in the shipyard during construction of the vessel by a classification society surveyor(s) to verify that the vessel is constructed in accordance with the approved design plans and classification rules

• Attendance by a classification society surveyor(s) at the relevant production facilities that provide key components such as steel, engine, generators and castings to verify that the component conforms to the applicable rule

requirements

• Attendance by a classification society surveyor(s) at the sea trials and other trials relating to the vessel and its

equipment prior to delivery for conforming with the applicable rule requirements

• Upon satisfactory completion of the above, the builder’s/

shipowner’srequest for the issuance of a class certificate will be considered by the relevant classification society and if deemed satisfactory, the assignment of class may be approved and a certificate will be issued

• Once the ship is in service, the owner must submit the vessel to a clearly specified program of periodical class surveys, carried out onboard the vessel to verify that the ship continues to meet the relevant rule requirements for continuation of class

43. l Marine Insight Class Surveyor in Yard : Photo by - Marhaban Yard Delivery Procedure l 44.

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The importance of classification society to shipowners:

1. Flag state recognition: Majority of the recognized flag states are bound to various maritime regulations under the

conventions drafted by IMO, which includes MARPOL, SOLAS, Load Line convention etc. As per SOLAS, a ship can only get a SOLAS certificate if it is “in-class” as

accordance with a classification society.

It clearly means that the flag state recognition and classification society certification are interrelated and equally important.

Without the classification society recognition, a ship will not able to ply in international waters.

Each flag state has a list of recognized classification societies from which a shipowner can opt for his/her ship.

The intention is to delegate the requirement and statutory duties of the ﬂag state to its recognized classiﬁcation society to ensure that the ship is complying with all the required

conventions, regulations, and protocols.

A flag state appoints a recognized classification society on its behalf to conduct the flag state surveys prior issuing flag state certificates and endorsing survey reports which are mandatory for vessel trading.

2. Insurance: Insurance companies are the savior for shipowners in case of any mishap, loss, or accidents. The insurance company will select a ship for insurance or decide the premium of insurance taking these factors related to classification society into consideration:

In case of accident or damage to ship or its machinery, the class surveyor will play an important role in providing a detailed report to the insurance company for claims.

• The reputation of the classification society

• The class rating assigned by the classification society to the ship

• Remarks, non-compliance and previous annual survey reports by the classification society

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Once the contract is signed with the shipyard and the flag state and classification society is selected for the ship, the next important step for the owner or its representative (a ship management company) is to recruit an experienced staff that can take the delivery of the vessel from the shipyard.

Following things are to be kept in mind when the ship management company/owner is selecting the takeover crew:

• Ensure that all the employees i.e. officers & crew signs the Article of Agreement (AOA) and official log book as it is a flag state requirement

• Passports, CDCs and visas of the officers & crew should be collected, checked, validated, and kept (Check the validity of Yellow fever certificate)

• Crew documents –check validity of certificates (licenses) and endorsements of officers and crew as per STCW’95 Selection of Crew for Takeover:

3. Safety of ship and onboard crew: With the set of surveys which are put “in-line” by the classification society and

regulatory authorities, the surveyors will check all the

important aspects of ship, which contribute to safety of crew and ship at high seas.

In case of any major deficiency, the class surveyor can give a notice to the ship and its owner by putting a condition of class or even cancel the class certification which will again make the ship unfit to sail.

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• Required officers have GMDSS certificates

• Pre-joining medical report and drug & alcohol (D&A) declaration received

• Acceptance of the terms and conditions of employment by the taking-over crew

• Crew list (needed for sailing) is prepared and copy of it is kept in office

• Safe Manning Certificate – Check minimum manning against on-signers

When?

The general practice for the ship management or shipowner is to send the takeover crew 30 to 60 days before the formal delivery of the ship.

The time to send the crew will vary depending upon the experience of the ship staff, the type of ship and different certification requirements for that type of ship. Hence, the selection procedure will start well ahead of this.

How?

The company must apply and get a valid visa for the takeover crew as they will be working and residing in the particular country for minimum of 30 days.

The visa should be taken for 3-4 months considering a buffer period in case of delay.

Manning Ranks: Photo by –Ravish Rishishwar

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For taking over of the vessel, only a few seafarers are sent which may include:

The rank of the selected crew may vary as an eligible and experienced 2nd engineer can also overlook all the engine room operations and requirements without needing the chief engineer or vice versa.

Similarly, only master may be sent to shipyard, without chief officer or any additional deck officer.

The general practice is to send management level officers from both the departments. Along with them, a rating (for general understanding of the ship and its operation) can be sent depending upon the company’s decision.

The recruitment of the takeover crew mainly depends on the experience of the seafarers and if they have carried out any such operations in the past.

51. l Marine Insight Class Surveyor in Yard: Photo by - Marhaban Yard Delivery Procedure l 52.

• Chief engineer

• 2nd Engineer

• Master

• Chief officer

• Fitter

The Takeover Crew: Photo by –Yanci Segovia

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Stay:

Since the takeover crew is going on an advance time of 30—60 days, they cannot use the accommodation of the vessel as it will not have the necessary resources for people to stay.

The company or the owner has to arrange for the

accommodation of the complete takeover crew in the nearest hotel or in any similar residential facility.

It is the responsibility of the company to provide food/ meals to its employees by either providing food coupons or

compensating them on per day basis. The transport of the crew from residence to shipyard must also be arranged by the owner or the shipyard.

Once the sea-trials are scheduled with the takeover team of seafarers, the crew may shift to vessel accommodation depending upon the results of the sea trials.

53. l Marine Insight Ship Accommodation Yard Delivery Procedure l 54.

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As stated earlier, the ship under commissioning stage

undergoes several surveys, which are not only performed by

the shipyard but it is advisable that the owner/ purchaser also surveys the construction process using a third party.

This will help the owner/manager to manage the risks associated with construction of the new ship as the

construction process will be completely monitored by the surveyor hired by them.

The critical areas can be identified at the design stage to ensure that the new vessel complies with the appropriate rules and regulations and is completed with minimal interruptions to the production schedule.

Ship Construction: Photo by - Arturo R. Zea

The owner/ manager can either hire a reputed third party surveyor or the classification society already opted for (Many classification societies provide other add-on services, which includes the survey during the construction process).

Arrangement for survey:

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The benefit of using the classification society is that the

surveyor and the class organization will have the complete data of the ship while providing the classification certificate.

The other way to keep a track of the entire shipbuilding process is to hire and place any knowledgeable personnel (marine engineer or independent shipyard engineer) as a representative of the owner in the shipyard.

He/she can be present during the entire construction process, monitoring the operation at ground level. This representative will be the one point contact between the owner and the

shipyard. The takeover crew will contact the representative for any discrepancies or approvals required in the shipyard.

Vessel Construction Inspection

Vessel Hull/ propeller Inspection: Photo by- Andrew Robson

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Responsibility of Takeover Crew

CHAPTER 4

Responsibility of Crew before Joining Yard

Responsibility of Crew in Shipyard

Duties of Deck Officers Duties of Engineer Officers Important Checks by Takeover Crew

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T

he responsibilities of seafarers, who are going to take the yard delivery of the vessel, must be thoroughly discussed with the ship management team located at shore.

To avoid making this process tedious and complicated, the deck and engine departments’ in-charge are provided with separate responsibilities and duties, for taking over of the vessel with utmost safety.

Following are the important preparatory points which the takeover crew must go through:

• Go to the company office for briefing as per the SMS

• Obtain yard delivery and taking over check-list from company’s office. Discuss various aspects and

procedures provided in them with safety/technical superintendents, if required

Responsibilities Before Joining the Ship: • Before delivery of ship, there will be sea trials and checks of all equipment and systems

• Obtain details and emergency contacts of owner/managers and hull and machinery (H&M) policy and reporting requirements of charterers

• The crew must understand and prepare for the communication (verbal & non-verbal) and cultural

dimensions/diversity for the country where the shipyard is located

Company Briefing

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• Ask for project, progress, follow-up and reporting, punch list etc.

• The crew should understand how company is managing the design approval and equipment acceptance at various site inspections

• Understand surveys which happen at different stages:

• Check who will be the head/ in-charge for approving in yard – either from takeover team or another company representative (superintendent etc.)

• The takeover crew and the company office together should do risk assessment through identification, evaluation, and mitigation of previous accidents or incidents happened in the shipyard

“ T

est report (under various stages) can be accepted or rejected by the surveyor while checking the performance of system during operating conditions.”

 FAT (Factory Acceptance Test)

 HAT (Harbor Acceptance Test)

 SAT (Sea Acceptance Test)

Factory Test: FAT

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Additional responsibilities of Deck and Engine department before joining the ship in yard:

• The deck officer and engineer who are made in-charge of their respective department (Master or Chief officer and 2^ndEngineer or Chief Engineer), and those who are part of takeover team must go to the office for briefing as per company SMS

• Apart from general briefing, he/she should understand all the important design aspects of engine room and deck machinery/ systems being installed on the newly

constructed vessel

• If any new technology is implemented on the vessel, or if the deck/ engineer officer has not experienced a new system, he/she must take a brief introduction and ask for manual or training from the company

• Ask for “Yard Delivery Checklist” from the company and go through it to understand the requirements

• Ask for “Taking Over” checklist from the company and go through it to understand the requirements

• Understand which machinery and systems are tested under factory acceptance and shipyard acceptance tests

• Understand the sea acceptance of various ship machinery and system that the ship crew will be performing in the sea trials with yard crew

Yard Delivery Company Crew: Photo by- Sudhir Dixit

(38)

The shipyard is a form of factory where fabrication is a

continuous process. You will see all types of high risk jobs such as welding, cutting, grinding, hydro blasting etc. taking place within one real estate.

Shipyard View

Responsibility of Ship’s Crew in Yard:

Yard Delivery Company Training

“ ^I t's important for the owner/ship

managers to train the crew regarding the

equipment/ system which has new features

to ensure that the yard delivery operation

can run smoothly ”

(39)

Once the takeover crew arrives to the country where the shipyard is based, they are first escorted to their

accommodation.

The ship crew then meets the owner’s representative, who can be:

The owner’s representative will ensure that the construction process is as per the regulatory requirements and on time.

He/she will also provide the information on the latest

timeline and situation of the under construction ship and on which areas the takeover team should concentrate more.

Most of the shipyards operate during the day within fixed timing. Once the takeover crew arrives at the shipyard for first time, they should do the following things:

• Ensure everyone has the necessary personal protective equipment

• Company superintendent

• Company appointed yard engineer

• A third party appointment (e.g. classification society shipyard service)

PPE in Yard: Photo by- CEPhoto, Uwe Aranas

(40)

• The senior most officer must take initiative to brief on the safe working practice and hazards related to shipyard

• Before going to the ship building site, visit the yard office and meet the shipyard representative and team heads responsible for construction of the ship

• Understand various safety protocols and safe working practices with the shipyard representative

• Discuss with the shipyard representative how the yard team is carrying out hazard identification, assessment and control in the yard

• Inform yard team about the crew’s readiness to participate in emergency preparedness and response drills, if

conducted by the shipyard for the yard crew

• Understand the fire fighting equipment provided in the shipyard and alarm signals used for emergency

• Check for emergency exits or muster stations

Yard Office

It is difficult for the small team of takeover crew to keep a track of each and every record of the work that is taking place on the under-construction ship as the yard deploys multiple teams and individuals to carry out different jobs.

(41)

As the main job of the takeover crew is to ensure that the machinery and systems are working and functioning as promised and are according to the contract, the safety and emergency devices should also be checked for their limits, specifications, functioning, operations and standards.

The most effective way (generally followed in shipyards) for the takeover team is to have a daily Safety and Progressive meeting to get the updates on yard construction operation.

This meeting should be attended by the following members:

The following discussions to be carried out in this meeting:

• The progress of ship construction and time line management

• Coordination among the yard, contractors and seafarers to ensure safe working conditions and job progress

• The takeover ship officers

• The owner representative in yard

• Ship repair manager representing yard

• Yard and company subcontractors (if any)

• Yard safety officer and important safety staffs

• Other yard supervisors involved with construction of ship

(42)

• Review all safety and work permits, which have been issued

• Review safety and work permits, which need to be issued during the day

• Discuss any violation of safety measures noticed during the previous days and identify the cause of the incident and the action to be taken to prevent reoccurrence

• Resolve the existing conflicts between different parties to ensure safe and smooth operation

• Identify the location and take extra precaution where hull blasting and hull painting are carried out

• Identify the location and take extra precaution where welding and hot work need to be carried out

• Identify the location and take extra precaution where heavy lift operations are carried out

• Identify the pipes and valves which are to be dismantled in areas where people are working. Marking and securing the area to be done to avoid fall and trips

• The shipyard must inform the takeover crew about any x- ray, ultrasonic or hydrostatic testing which have to be done during the day

• Review own or other vessel movements that could impact on safety or progress of the repairs

• Review all systems and equipment tests and coordinate

74. l Marine Insight Checks with Shipyard Representative Yard Delivery Procedure l 75.

(43)

The ship crew must distribute their work among the team members and at the end of the day, should have a formal meeting to:

• Understand the work progress and efficiency of the operation

• Discuss the recorded or witnessed dock test performed by the yard crew on any machinery or system

• Discuss and enhance the approach to yard site for inspections

• Understand the practices and principles of commissioning work by discussing each other’s experience throughout the day

• Develop updated guidelines on commissioning procedures

• Identify other potential cost effective alternatives to inspections and tests

• Apply new methods and procedures for investigating outstanding works

• Discuss compliance, safety and environmental performances

• Discuss technical questions related to construction and tests, which will help fellow crew members

Ship in Yard: Photo by- Andrew Robson

(44)

Deck officers, as a part of takeover team, should ensure that all the deck equipment and fittings are as per the blueprint.

The deck officer shall consult his/her fellow engine officer for technical understanding and shortcoming of deck machinery and equipment.

Bridge Equipment Checks:

• Do a bridge familiarization to understand the location and equipment provided

• Check the off-course alarms and differences between gyro, main and spare magnetic compasses for deviations.

Officer should try and figure out compass adjustment techniques

• Check the posted maneuvering information in the bridge i.e. wheelhouse poster

Duties of Deck Officers in Shipyard: • Check for Aerial / Antenna plan and if it is not done, prepare and post the same in wheelhouse

• Check and ensure all the GMDSS and other communication equipment are installed as per the requirement and blueprint

Bridge Equipment Inspection: Photo by- Pascal Rheaume

(45)

• Inclinometers fitted on the bridge should be verified for their accuracy

• Check and record the spares provided for the bridge equipment

• Ship Security Alarm System (SSAS) buttons should be checked for their location and modes of operation

• Rudder angle indicators, repeaters for Gyro compass, Engine RPM indicators, Doppler log, EPIRB, SART, VDR locations and fittings should be checked with the bridge layout plan

• If any bridge equipment is not functioning or installed, same has to be informed to the company representative, who will raise this issue with the yard representative

Inclinometer: Photo by- Edwin Maluenda

Indicators : Photo by- Al-Shehihi

(46)

Bridge manuals and publications check:

• Check the charts & status of correction provided

• Check the pilot card to verify the ship particulars and details are filled correctly

• Check the compass deviation card for its accessibility and errors. If the deviation exceeds 5 degree, request company yard representative to arrange for compass adjuster

• Ensure all the manuals of bridge equipment are provided

Checking Compass

(47)

• The language of the manuals should be in English

• Check the test procedure for navigation and signal lights along with operation of lights and panel as necessary

• Ensure all the important drawings and display posters are available on bridge

• Ensure all the mandatory publications are present on the bridge. For this, a customised list for the type of vessels e.g.

bulk carriers, chemical tankers, oil tankers, container ships etc. can be used to ensure none of the publication is

missing

• Check GMDSS maintenance plan certiﬁcate is provided.

VDR & SVDR saving & recording procedures are understood, HDD for data recording is in order and working. Alarm codes are displayed and understood.

DRU units are in place and secured as per requirements

• Check ECDIS interfaces with various sensors and inputs are functional and in place

• Check that the certificate of service and chart, and the corrections supplied from the chart distributor are valid and posted on bridge. The supplier should be approved by UKHO as well

• Check distress instructions are posted in the required locations on bridge

Bridge Posters/ Drawing: Photo by –Bassam Kawgy

(48)

• Ensure weather/ meteorological equipment are installed and their spares are provided (barograph paper,

thermometer, vick & container, met. log book, coding decoding book, etc.)

• Normally the vendor, who manufactures and installs the equipment will also be responsible for testing, hence ask for the test procedure performed on the GMDSS

equipment, including battery on load tests, commissioning of GMDSS equipment, EPIRB

registration etc. Ship’s officers should verify particulars and name of the vessel

• Check master clock, GPS and Doppler log inputs to various GMDSS equipment, Radar and ARPA , ECDIS, echo sounder, AIS , ODME panel, SSAS and other equipment

• Anemometers, wet and dry thermometers, sextant, chronometers, azimuth circles and other equipment for navigation to be checked and provided by the yard

• Window wipers, bridge window heaters, communication systems between bridge, E/R and various other locations to be checked

• Important posters such as maximum anchoring depth chart, radar blind zones, height of eye table, relative humidity chart, compass deviation curve, steering gear diagram, ship particulars, mooring diagram, muster lists, emergency signals, emergency contact information , manoeuvring characteristics etc. must be available

Bridge Window Wipers: Photo Credit- Abin Babu

(49)

Checks on Deck Equipment:

• Check installation and working of steering gear

• Check operation of emergency steering gear

• Check installation and working of mooring winches, anchor windlass and other related equipment

• Check the functioning and installation of radar and concerned equipment

• Ensure GMDSS maintenance plan certificate is provided

Ship Radar Mast: Photo Credit- Wikimedia

Steering gear

(50)

• Check the accommodation/ gangway ladder motor functioning and installation

• Check the test results of static weight test for accommodation ladder

• Check the installation and functioning of ship cargo crane

• Check the test report of windlass and mooring winches (break test, load test, lifting speed test etc.)

• Check for any hydraulic doors provided in the ship side

Windlass: Photo by- Abhishek Bhanawat

Ship Crane: Photo by- Ahmed Khan

(51)

• Check the yard test reports of all the deck machinery

• Check the installation and functioning of ship cargo hatches and covers

• Ask the yard supervisor to demonstrate proper ballast water system tightness and pump operations by pumping and taking suction from the ballast tanks

Checks for cargo equipment and manuals :

• Ensure Cargo Securing Manual (CSM) and related securing equipment are provided

• All securing equipment are checked for quantity, type and condition

• Cargo, ballast & fuel ullage tables are supplied to the ship

• Check the installation and working of cargo pumps, cargo lines and other cargo related equipment

• Check the manufacturer’s test report of bow thruster and podded propulsion system

• Check the ballast line, pumps etc. are installed as per the blueprint and are in perfectly working condition

• Check working and installation of ODME in tankers are as per the regulation. Also, feed of GPS position, ship’s speed and UTC time to be verified

• Check all the other deck equipment for their operation and installation

Podded propulsion system:: Photo by- Felipe Santos

(52)

• Ensure damage stability booklet, ship structure access manual, approved loading conditions, damage control plans are provided or compiled and approved with all required data (for e.g. Stability & Hydrostatic data)

• Inert Gas Manual –for tankers and combination carriers

• Crude Oil washing (COW) Manual –for tankers and combination carriers

• Oil Discharge Monitoring Equipment (ODME) manual – for tankers and combination carriers

• Clean Ballast Tanker (CBT) manual – for tankers with CBT

• Ensure the Ballast Water Management Plan is as per the regulatory requirement

• Ensure all the required manuals and papers are endorsed by class for name and flag

• Load and stress distribution plan is provided

• The loadicator is tested to see if test conditions match results with that of the loading manual

• Shipboard oil pollution emergency plan(SOPEP) or shipboard marine pollution emergency plan(SMPEP) is provided and approved, endorsed by Class

Ship Loadicator: Photo by- Abhishek Bhanawat

(53)

The engineers responsible for yard delivery of the ship have to carry out a number of checks for installation and operation of various ship’s machinery.

The complete engine room machinery comes under the

Duties of Engine Officers in Shipyard: supervision of engineer officer who needs to perform the following checks:

Engine room machinery:

• Check the test bed trails report of the marine engine and associated plant machinery and system. The test must prove the functionality of the plant and associated auxiliary systems

Engine Installation in Yard

Engine Room Platform in Yard

(54)

• Check all the yard delivery trails of various engine room and deck machinery

• Ensure the internal combustion engine components are hydraulically tested by the manufacturer by asking for the record from the yard

• Check the reduction gear test report, which will be used as a reference in sea trials

• Check the yard test reports of the refrigeration system for leak test, cooling test, insulation test, brine piping test etc.

Various Engine Room Machinery

Leak Test of Reefer System

(55)

• Check the provision of redundant propulsion system provided in the ship is as per the requirement

• Perform a visual inspection of pad eyes in the engine room

• Ensure to check the report of shafting alignment and torsional vibration of marine propulsion system which will be used as a reference in sea trials

* Shipyards may not have shafting alignment test but they do it as an inspection. It is always recommended to keep the

shafting alignment as a part of a quality inspection process.

Pad Eyes in Engine Room Intermediate Shaft

(56)

• Check the hydraulic pressure testing report of ship’s boiler

• Check the pressure testing reports of bunker and cargo piping system

• Check the steering and rudder systems

• Ask the yard supervisor to demonstrate proper system installation and operations, including all controls and safety devices of machinery seawater cooling system, lube oil system, starting air and control air system, steam system etc.

Pad Eyes in Engine Room

Demonstration by Yard to Takeover Crew

(57)

Electrical Checks:

• Check report of the test which verifies the effectiveness of grounding continuity conductor

• Check the provision provided to ensure the bonding for the control of static electricity (e.g. propeller shaft

grounding)

• Check report of the test that verifies the effectiveness of grounding of non-current carrying exposed metal parts of electrical equipment

• Check with the yard that all the joints, connections, circuit breakers are compliant with respect to temperature

Grounding of Propeller Shaft Air Circuit Breaker

(58)

• All essential electric motors and equipment which can be started in the yard should be operationally checked including standby machinery

• Check the test reports of installed transformer

• Check the test report of insulation resistance of various machinery

• Check the date of the test performed as an old date may require additional insulation resistance (IR) test on that system

Testing Standby Pump

Insulation Resistance Test

(59)

• Check test results of dielectric insulation tests on all propulsion cables, other than internal wirings

• Ensure high voltage cables are tested by supplying a DC voltage 4 times the rated voltage for 15 minutes

• Ensure that a power frequency voltage test has been carried out on high voltage switchgear and control gear

• Check if all the cables with terminations and splices have been subjected to a voltage test after installation

• Check if the installed main, emergency, and distribution switchboards that are put into service have their insulation resistance not less than 1 MW

• Check the arrangement of emergency power supply

• Ensure testing of motor operated valves should commence after flushes and hydrostatic testing is completed for a particular system

• Check the test report of insulation resistance of various machinery

Testing Standby Pump

Testing Voltage

(60)

There are several checks, inspections and tests that need to be done by deck and engine officers together. Important points are listed below:

Lifeboat/Life raft:

• The lifeboat davit test procedure could be combined with the rescue boat handling and lifeboat operations test procedures. Life rafts HRU and other mechanism

should also be checked

Checks by Seafarer Takeover Team: Fixed fire fighting installation:

• Prior to sea trials, demonstrate proper system installation and operations, including all controls and safety devices.

Cylinders are to be weighed and recharged if weight loss exceeds 10% of normal charged weight

Lifeboat in yard Check on CO2 FF System

(61)

• Verify required service pressures at distant points in the system. During trials, operational test of the foam system for each covered zone to be performed

• Operational checks of general alarms are also to be performed

Fire detection system:

• Confirm operational abilities of ship’s fire/smoke detection systems

• Perform fire detection system testing before sea trials Automation/ Control Checks:

The modern ship is filled with hundreds of automations and control systems, whose installation should be checked by the takeover team to ensure the shipyard has provided systems as promised.

The main operation of all control and automation of the ship systems is tested in sea trials.

Fire Alarm System

Controls in ECR

(62)

Inert gas system in tankers:

Ship alarm system: A test procedure should address operational checks of contactors, bells and lights before Dock Trials/Sea Trials.

Elevator:

Check the functioning of elevator including brakes and wires.

Pipes testing:

During the production process, all piping systems must be hydrostatically or pneumatically tested to show system tightness. Check the report of the tests.

IG Controls Deck Piping

(63)

Ventilation fans and dampers:

Prior to sea trials, demonstrate proper system installation and operations, including all controls and safety devices.

The fire damper and flaps testing should be performed with other ventilation test procedures.

Tank Testing:

Prior to sea trials, the tanks and bulkheads shall be tested by hydraulics, hydrostatics or with air to ensure structural and/ or watertight integrity. Bottom plugs to be checked for securing and tightness and while filling up tanks, hull to be inspected externally for any leaks or air bubbles formation.

Funnel Flaps

Ballast Tank With Gas Detection Sensor

(64)

Accommodation Checks:

• Accommodation to be provided with rated air

conditioning and heating system. Yard must demonstrate proper system installation and operations, including all controls and safety devices for accommodation AC

• Paint shall be white or light color enamel or suitable material. Natural lighting to be provided in the cabins

• Marking for sleeping room and other spaces, indicating maximum number of seamen to accommodate shall be provided

• Beds shall have at least one side clear access

• Furnishing and fittings in sleeping rooms to be provided (wardrobe , table, chair etc.)

Light Color Paint in Cabin Furniture and furnishing

(65)

• A separate mess room to be provided for officers and crew and it shall not be combined with sleeping rooms

• All exposed decks above accommodation shall be covered

• There shouldn’t be direct opening between accommodation and deck/engine stores

• Recreation spaces and smoking room with sitting arrangements must be provided

• Check the provision store is gas tight

• Batteries not to be kept inside accommodation

• Ensure additional lights are provided in the crew rooms (200 lumens at sleeping room and 400 lumens in hospital)

Mess Room

Recreational Rooms

(66)

• All steam pipes, hot and cold water pipes inside accommodation to be lagged

• Galley to be provided with a separate entry, apart from the entries from both mess rooms

• All the fixed fire fighting system for accommodation to be checked for alarm and operation

• Washroom accessories (toilet mirror, cabinet, curtain, wash basin etc.) must be provided

• No manholes or other openings of oil tanks shall be in accommodation

• Fire flaps, alarms, indications, location of portable extinguishers to be checked

• Apart from the above facility, the following to be provided:

• No crew accommodation shall be shared with passengers

• Check if the doors, bulk-heads and arrangements for the accommodation are as per noise reduction requirements

Ship’s Galley

• Laundry facilities

• Water closets

• Dry provision room

• Cold room

• Hospital room

• Medical cabinet

• Protection against mosquitoes/ insects

A Practical Guide to Yard Delivery of New Ship

A Guide for Seafarers, Shipowners and Ship Managers

A Practical Guide to Yard Delivery of New Ship

Table of Content

A Practical Guide to Yard Delivery of New Ship

1 2 3 4 5 6 7

About Marine Insight

Introduction

CHAPTER 1

T

Introduction

The Contract

CHAPTER 2

A

Classification

& Flag State

IMO “C

“I

Responsibility Of Owner / Ship Manager

CHAPTER 3

T

Responsibility of Takeover Crew

CHAPTER 4

T

“ T

“ I t's important for the owner/ship

managers to train the crew regarding the

equipment/ system which has new features

to ensure that the yard delivery operation

can run smoothly ”

IMO ^“C

“ ^I t's important for the owner/ship