Key International Media Announced Building of Eclipse II in Rijeka's 3. Maj
May 19, 2020 - Last week, the key international media covering the tourism and shipbuilding sectors announced that the Eclipse II, the sister ship of the Scenic Eclipse, the most sophisticated and elegant ship of its kind, was being built in Rijeka's 3. Maj.
Cruise Industry News reported about the steel cutting of the Scenic Eclipse II in Croatia in April this year. Recall, the company also announced it would build five vessels in the next six years in Croatia.
The independent luxury magazine showcasing the finest and most luxurious things in life, Luxurious Magazine, also published an article about the second coveted discovery yacht from The Scenic Group in their ocean fleet, at the Rijeka shipyard in Croatia.
Another great insight is shown by Latte, Luxury Australian Travel Trade E-news, who wrote that Scenic is now progressing with developing an expanded five-star yacht fleet under a new Croatian subsidiary called MKM Yachts. Scenic Eclipse II will be the first new ship to be built at the 3. Maj dockyard in four years.
Luxury Travel Advisor, describing themselves as the top travel website for travel agents seeking the very latest in luxury cruise news, luxury destination news, luxury hotel news, luxury airline news, and luxury tour news, did not miss the story about the construction of Scenic Eclipse II.
Besides TCN's report on the same news, many Croatian portals published an article about cutting the steal, adding how the yacht sailed into the port of Rijeka where it will remain on a dead berth until the end of the year and until the next season, i.e., until the coronavirus pandemic calms down.
Now meet the original Scenic Eclipse. You can learn more about Scenic Eclipse on the official website.
Corona Cruiser Crisis? Not in Croatia: Work Starts on Eclipse II
April 24, 2020 - An important day for shipbuilding in Croatia, as work on new luxury polar discovery cruise ship Eclipse II begins.
“Eclipse II” was ordered by MKM Yachts, a subsidiary of Scenic Group, an Australian corporation that has shipbuilding experience here in Croatia, because their “Scenic Eclipse”, the best luxury vessel of its kind in the world in 2019, was built in the Uljanik shipyard in Uljanik.
Scenic Group has plans to build four more cruisers such as “Scenic Eclipse” and “Eclipse II” in 3. Maj. In total, the value of this project is € 860 million, and this deal represents a new great opportunity for the revival of Croatian shipbuilding and the preservation of hundreds of jobs in Rijeka’s shipyard.
The start of work on Eclipse II, a new polar cruiser for the Australian Scenic Group, was marked in the 3. Maj dockyard, and Minister of Economy, Entrepreneurship and Crafts Darko Horvat, emphasized that the polar cruiser was the first new ship to be built at the dockyard in four years.
Some 1,000 tons of steel were delivered from North Macedonia to the dock required to build the Eclipse II polar cruise ship. Saša Čokljat, managing director of MKM Yachts, a Croatian subsidiary of Scenic, an Australian corporation that commissioned Eclipse II, explained the new business model in which MKM Yachts has taken a small part of Rijeka's shipyard on concession and is using existing infrastructure and knowledge of Croatian shipbuilders in cooperation with Scenic's expert team, to complete the construction of the Scenic Eclipse carbon copy. The project is a result of strong support and partnership with the Croatian Government and the 3. Maj shipyard, Cokljat mentioned in his speech.
Čokljat also pointed out that this great project would have failed if the Croatian Government had not recognizes its potential at the very beginning of the negotiations. Prime minister Andrej Plenković, Minister of Economy Darko Horvat and Minister of Finance Zlatko Marić showed courage and readiness to "think outside the box". That resulted in a project that offers a long-term development perspective to Croatian shipbuilding and the opportunity to preserve rich traditions in shipbuilding, continuity of production and knowledge, as well as hundreds of jobs in Rijeka.
"Today, during the crisis caused by the coronavirus, we are starting a new business that will, we believe, strengthen Scenic's fleet, as well as Rijeka’s shipyard. As other cruising companies put their projects on hold, Scenic Group 3. Maj begins to create a common future for both Scenic and the Croatian shipbuilding industry on a sound basis. I believe the niche for the construction of research cruisers represents a sound direction for the revival of Croatian shipbuilding, its new face in the future. We can be proud that the construction of one of the best ships in the world in its class is taking place right here in Rijeka”, Čokljat added.
"Eclipse II" will be the sister ship of "Scenic Eclipse", a 6-star luxury vessel designed for excursions to both poles, which was voted by critics as the best luxury ship in the world in 2019. “Scenic Eclipse” is expected to arrive in the port of Rijeka between May 2 - 4. and it will remain in Rijeka until the coronavirus lockdown ends.
“Scenic Eclipse” was built and equipped in Uljanik, Pula – but given the development of the situation in Uljanik, the ship was completed by the owner himself instead of the shipyard. At the moment when the ship was only half-finished, Uljanik went bankrupt and into receivership. Instead of collecting 50 million euros in state guarantees, Scenic decided to give back the guarantees, keep the ship and continue construction with its own resources and manpower. A team of Croatian shipbuilding engineers, designers, and about a thousand other experts and workers were assembled working on the completion of the ship on a daily basis. Despite all the difficulties in the process of production, the final result was great, so Scenic Group owner, an Australian businessman Glen Moroney, decided to continue building new cruisers for his fleet right here in Croatia.
Reviving Rijeka Shipbuilding: Scenic Group Boss on 860 Million Euro Deal
Ship Builders
While this boat was being built, the Pula shipyard Uljanik was already in serious trouble, but Moroney wouldn’t give up. He took over the boat and his engineering team, with the team of around 600 subcontractors, and he managed to finish this extremely sophisticated and expensive ship. Its sister ship Eclipse II, an even more perfect version, should be built in Rijeka, in the 3. Maj shipyard, and works should start before this summer. It will be built by the Scenic Group company just registered in Croatia, MKM Yachts, and the Rijeka shipyard will be a subcontractor. That’s very similar to the model Moroney was forced to implement in Uljanik, but it’s also the model he uses to build his smaller and simpler ships in Asian shipyards.
- We’re becoming a shipyard, and not just shipowners in Scenic, and that’s a process that happened progressively, it lasted for years. During that time we managed to create a core base of people, engineers, designer knowledge and experience, so now we can manage the entire process of the creation of our unique ships. When we started building our own fleet of river cruise ships, back in 2007, what the European shipyards had to offer was not compliant with our ideas and what we wanted to highlight and offer on the cruising market. That’s how we started developing our own projects for ships and then letting other shipyards build them for us. We built 20 river cruise ships in Europe, and in 2014, in Asia, Vietnam we started building our own ships. The local shipyard performed the steelworks, and then we and our other subcontractors furnished and completed the ship. We have built three ships until now in Asia and they’re beautiful, built according to all European standards and with a lot of equipment, Moroney explained why he decided to go into the adventure of building ships, in addition to it, obviously, being a cheaper solution.
One thing we know about the cruise ships you plan to build in 3. Maj is that there will be five in total, although some people mention six, and the first one of them will be a copy of the one you built in Pula. Not much is known about the other four.
- You need to understand that I can’t go into too many details, because of the competition on the market. I can confirm we’re talking about five ships for now, with the total value of around 860 million euros, and we’ve also made public that we’re going into the building of Scenic Eclipse II, for which the keel will be laid soon in Rijeka shipyard. As far as the other four ships are concerned, I can tell you that they’re in various stages of designing, they will resemble Eclipse in a way, however still adjusted to the specific niches of the cruising market we’re targeting. They will all be furnished according to the highest standards, so we’re talking about six stars, and their class will allow them to cruise in the polar regions as well.
A painful experience
What makes you think you won’t go through the same thing in ‘3. Maj’ as you did in Uljanik, which delivered Eclipse over a year late?
- Our experience in Uljanik was very painful and it cost us a lot of money, however, we learned a lot through it. I dare say that during the twelve months it took to complete the Scenic Eclipse, and we’re talking about one of the most complicated passenger ships ever built in the world, we compressed the experience which the shipyard acquired in the last more than twenty years. What we went through in Uljanik made me firm in my opinion never to sign another contract again unless we have control over the project. In this project, Scenic will be managing the entire process, and 3. Maj will be our subcontractor for the building of the ship and equipping it on the slipway. I’m certain it will allow for the optimal combination of the two complementary sets of knowledge, as the shipyard will do what they’re best at and what they do great, which is building the keel and the basic equipment while the ship is on the slipway.
Our part of it, what we do best, is the final furnishing, the luxurious part of the ship, the entire interior of the ship, finishing the details. You know, we started in Pula with 2 workers, we needed ten at most, had everything gone as it should have and if the shipyard wasn’t heading to bankruptcy. In the end, our team grew to a hundred people, with highly specific knowledge and engineers who coordinated and managed around 600 subcontractors. And those people, and most of them are still with us, are the reason why I believe we shouldn’t have any problem building Eclipse II in the Rijeka shipyard. In the last seven, eight months we’ve been through each piece of the project documentation, each piece of the Eclipse, to make sure the building of the second ship will go smoothly.
(The Moroneys with Dame Helen Mirren, Godmother of Scenic Eclipse)
Will this final furnishing of the ship also require additional help from the 3. Maj workers?
- Of course. There will be opportunities for everyone doing good and competitive work.
Many people see you as a new strategic partner in 3. Maj. Is that what you’re considering, becoming the owner of the shipyard?
- The fact is, with this project for the building of five cruise ships, we’ve already become a strategic partner to 3. Maj. However, it’s too soon to say anything more. We’ll see. There are many things that need to be done and put in order in the shipyard for the conversations to go that way. There’s no way to avoid the fact that 3. Maj hasn’t worked and hasn’t been operational for over a year, and it’s not working at full capacity now either. To be able to move on, the shipyard needs to finish the existing new ships because that’s what got them the credit lines, then our building needs to start, and it’s certain they need to invest into modernisation. Let’s just take it one step at a time and see where that takes us. Let’s be real, shipbuilding and cooperation is basically gone in this region. With our two boats, which is how much we plan to work on at the same time, it’s hard to see the full rehabilitation of the former capacities of 3. Maj. However, if we manage to create a pool of specialized producers with the most recent know-how and technology in the Rijeka area in the next few years, in synergy with the Italian shipyards we’ll have a healthy core and then anything is possible. The biggest shipyard and the world number one when it comes to building cruise ships, Fincantieri is just three hours away, and I see that as one of the key advantages of Croatia and 3. Maj. All their producers and subcontractors are also within two or three hours from Rijeka. That’s an advantage that needs to be exploited.
You asked for and received government guarantees from the Croatian Government for those five cruise ships. You must be aware that the Croatian taxpayers have opposing opinions on how much the state should intervene into shipbuilding.
- We’ve had numerous meetings about that in the Government, I’ve met with PM Plenković personally four times, and in each of those meetings, he actively promoted the survival of shipbuilding, however making it clear that the Croatian state budget can’t take the burden. I want to make it clear that our Scenic Eclipse in Uljanik didn’t cost Croatian taxpayers anything, even though we had the government guarantees. We didn’t activate them, and I think it’s one of the reasons why we were in the position to negotiate this deal. We got the new guarantee because in this case, we are investing more, we are investing first and our risk is much larger. This is not about the counter-guarantee, because the government guarantee is not given to us, rather to the bank for the credit line to build the cruise ship. I mention that because when we made the deal with Uljanik, all of our payments to Uljanik were covered by the government with counter-guarantees. As a shipowner in Uljanik I had no risk, and neither did the shipyard because everything was paid by the Croatian government and the state budget. Now things are different because the guarantee goes to the bank and covers 48% of the construction cost, and the state keeps the first mortgage over the ship while it’s being built, which means over my 52 per cent too.
The rumour is that the Scenic Eclipse might find its way to Croatian Adriatic coast soon.
- Yes, as it leaves Venice Scenic, Eclipse should arrive in Zadar on May 22nd, and a day later it will dock in Dubrovnik.
