Page 39 - IB April 2023

Green Transport Green Transport

decarbonisation commitments, Project Cerulean provided the design. Construction costs climbed during COVID, with
insight into legislative processes required to establish inter- shipyard cost projections reaching US$5.37m. The additional
island shipping sector green corridors. The versatility required rig costs brought total costs above US$6.41m.
for provision of outer-island service was presented to the Cen- MCST devised additional methodology for quantifying
tral Pacific Shipping Commission (CPSC), with acknowledge- socio-economic benefits for communities along the intended
ment and approval of a route inclusive of the Marshall Islands, initial trial route, that is, Lautoka, Fiji to Funafuti, Tuvalu,
Kiribati, Tuvalu, and Fiji. encompassing Rotuma, Nukulaelae, and Niulakita. Projected
However, given the per capita trade volumes estimated social and environmental Return on Investment (SEROI) over
along this route, a single Cerulean-class vessel would have the estimated 30-year vessel lifespan reached US$21.85m.
been highly insufficient to meet demand. These communities Less compelling were cumulative cash flow projections, only
are currently limited to small aircraft (if airstrips are avail- breaking into profitability in the 29th year of operations on its
able at all) and infrequent government-subsidised shipping. most promising evaluated route at this elevated build price.
Since the project’s inception, market forces drove the Given this, Swire Shipping’s Sustainability Fund Board decided
potential for operational profitability beyond even marginal not to proceed to a build tender, given various increases
profits in a commercial environment. This was inclusive of in capital demands relative to the administrative oversight
consideration of WASP-related savings on fuel expenditures. required by Swire. Following this determination, consolidation
Our analysis included variable fuel price conditions in a mar- of project findings resulted in delivery by MCST of the Project
ket where fuel prices have hit both record lows and highs in Cerulean Cumulative Report.
the shipping sector over the project lifespan. A key research finding is that moving a localised shipping
There were three key assumptions that underpinned the transition agenda forward requires additional prioritisation
research; that is a shipyard in the Pacific Islands would be and capitalisation by Pacific states and financial partners
preferred to construct the vessel; Swire Shipping would be re- ready to support decarbonisation of public services under an
sponsible for operation and administration of the vessel and, economic model of avoided loss, not commercial profitability.
if demand exceeded supply, scaling and replication of Project Building upon this unique and valuable analytical and design
Cerulean would be an option worthy of additional research work will enable our countries to make more informed ship-
and action. ping decarbonisation decisions for their domestic fleets.
Through the construction contract bidding and negotiations, Project Cerulean provided a critical look at the chal-
a variety of challenges arose, ultimately proving detrimental lenges facing decarbonisation of Pacific maritime operations,
to operational viability. Chief among these was continued advancing international, multi-sectoral discussions concern-
increase in construction quotes by the various interested ship- ing shipping services. The Research Collaboration Agreement
builders, escalating as more refined design specifications were between Swire and USP was a regional first, and has enabled
delivered. Price increases reflected an industry-wide increase MCST to undertake one of the most detailed and cross-dimen-
not unique to Project Cerulean. The initial quote for a similar sional investigations into the transport requirements of outer
vessel design was for US$2.6 million. islands in decades. It represents a necessary step in better
The Cerulean design was conducted by renowned naval ar- understanding how to address human mobility and transport
chitects VPLP. During the preliminary design stage, MCST eval- connectivity issues at a unique, remote, and vast scale.
uated shipbuilding capacity across Oceania to meet project Unachievable in isolation through singular project interven-
requirements. A quote from Bluewater Craft in Navua, Fiji was tions, a broad, sector-wide investment in the shipbuilding and
obtained alongside preliminary quotes from Asian shipyards. seafaring sector is required to restore viability and sustain-
The initial Fijian quote totalled US$2.98m, however, over the ability to the process of traversing these large ocean states in
course of full-build design, the scale and complexity of the a just and equitable manner. This research highlights the chal-
vessel outstripped the capacity of Bluewater Craft to accom- lenges of organising a tailored design appropriate to Pacific
modate the construction, and no other regional shipyards operating realities and provides greater depth of understand-
could submit a construction bid, due to capacity or scheduling ing concerning current maritime transport sector needs in
limitations. the region. This is particularly relevant for the broader policy
The iterative full-build design process between Swire, MCST, and financial development dialogue to decarbonise within
VPLP, and Lloyd’s Register, resulted in the Indosail rig design the established reduction targets of the Pacific Blue Shipping
being selected as the most suitable for reducing crewing Partnership co-chairs, RMI and Fiji. For achieving such high
requirements while meeting performance efficiency targets. ambition commitments, MCST invites partners to build upon
However, finding a yard to construct this at a realistic cost the work of Project Cerulean to devise, construct, and deploy
became a fundamental challenge. One key industry gap not a fleet of new generation of vessels to meet the Pacific’s
properly captured on the global scale is the absence of appro- needs.
priately skilled and equipped shipbuilding firms able to deliver
sailing vessels for commercial, as opposed to luxury/sporting Andrew Irvin is now undertaking his PhD on a 3-year interna-
purposes. Consequently, VPLP solicited Marechal to provide tional scholarship at the University of Melbourne.
delivery of a revised Gaff Ketch rig instead of the preferred
Indosail design, reducing the overall efficiency savings from editor@islandsbusiness.com

Islands Business, April 2023 39