Political Affiliation Sinking Ceylon Shipping Corporation

• Wages Issue on Lanka Mahapola ‘sorted out’
• Essential Repairs in Durban, South Africa will take ‘One week’ 
• Dr Senarath: “We have the ability to pay” 
• Crew forced to sign blank forms

By Faraz Shauketaly

Political affiliations are costing the Ceylon Shipping Corporation (CSC) to incur further significant losses. One of only two ships that the financially-troubled CSC owns, Lanka Mahapola is almost past its sell-by date with the CSC virtually unable to meet the cost of upgrade and repair bills. In this backdrop the CSC entered into a Charter agreement with a little known company ‘Triple S Shipping’. In the latest twist to the sorry saga of this vessel, Lanka Mahapola was detained in Durban by South African authorities. Small in experience the company boasts of powerful connections in the maritime industry. One of those closely involved with Triple S Shipping is also a Director at Sri Lanka Ports Authority, Dr Sanjaya Senarath. Dr Senarath is said to be the cousin of Gamini Senarath, Chief of Staff to President Mahinda Rajapaksa and is also on the Board of Sri Lanka Insurance.
Terry Smith, a Director at Seaclad Maritime, the ships’ agents, speaking exclusively to The Sunday Leader from Durban, said that it was his understanding that monies had been remitted. Mr Smith was hopeful that these funds will be enough to settle the crew wages. Smith said that at the moment their company was technically not the agents as the ship was under the custody of the Marshalls by Court order. Upon the satisfactory conclusion of the wages issue the Court would release the vessel and Seaclad Maritime would assume the role of ships’ agents. He confirmed that two representatives of Triple S Shipping including a ‘Mr Thushara’ were in Durban to co-ordinate the payments and obtain the release of the vessel. Mr Smith, commenting on the fact that the ship’s safety certificates had expired and was also in need of repairs, said that these were not ‘major’ issues and he expected that the necessary repairs would take ‘2/3 days’ to complete. He also added that a Surveyor had arrived from Dubai to inspect the condition of the vessel, part of the usual process when renewing certificates.

Our source on board the Lanka Mahapola, a senior maritime personality revealing information on conditions of anonymity explained the events leading to the current situation in which there is a real possibility that CSC will incur significant losses in their attempt to retrieve the vessel from South Africa.
Built in Japan this was one of the last two Container ships operated by the Sri Lanka Government-owned Ceylon Shipping Corporation Ltd. Around August 2011 this vessel was taken on hire by Triple S Shipping Ltd, a newly formed Shipping Company in Sri Lanka. Crew was employed on this vessel in Galle Harbour. The ship it was said would be carrying Sea Marshals for anti-Sea Pirate operations off Oman Port. However this did not materialize and the vessel was instructed to proceed to the Port of Visakhapatnam in India. Vessel left Galle Port on 14the September last year, and anchored off the Port of Colombo for fuel, water and provisions. Clearly owing to financial constraints the ships’ charterers Triple S Shipping only purchase minimal quantities of fuel – meaning that the vessel’s generators were stopped during daylight periods and food and water were rationed. The vessel was supplied with very minimum quantities of fuel, water and provisions and left Colombo three days later for Visakhapatnam for loading of steel plates for discharge in Jebel Ali.
Having arrived off Vizaq port on 20th September, the vessel was kept at anchorage ‘out harbor’ for 07 days due to payments having not been remitted to the local agents for handling the vessel in port. The vessel finally berthed on 27th and loaded 6,925 metric tonnes of steel plates.
On berthing at Vizaq the vessel’s Chief Engineer requested for  supply of diesel oil to sail to Colombo as the quantity on board (4.8 metric tonnes) was insufficient. After much communication with the charterers who said they had no money to supply fuel, the Chief Engineer taking a great risk agreed to sail to Colombo with 4.8 mt of diesel. The vessel safely arrived off Colombo and anchorage on 4th October but no fuel was supplied till 6 days later. During this time the vessel was daily blacked out (Generators stopped) during the day to conserve the minimum amount of fuel on board. With this being a centrally air conditioned ship the crew suffered immensely without even a table fan in their rooms.

Very Little Food On Board:
Also during this time food and water were rationed and cooking was limited to using various pieces of wood found on board as there was no power to operate the ships cookers. Water was also not supplied through the piping system as the pumps could not be operated without electrical power. During this one week stay at anchorage various shipping and media personnel contacted the Captain but due to pressure from the Charterers the former Captain was not allowed to divulge any information about the living condition on board the ship to anyone. During this time the crew had not received any wages nor the families received any allotment money that was to be remitted to them for their monthly expenses. At the anchorage, Dr. Sedara Senarath said to be the Managing Director of Triple S Shipping contacted the Captain via radio saying no funds were available at the moment and that all wages would be paid up in Jebel Ali once the cargo is discharged and freight money was collected. However, no settlement of crew wages were made in Jebel Ali and the vessel was instructed to sail to Mina Saqr. A consignment of 3,300 metric tonnes of Hydrated Lime in pallets was loaded at Mina Saqr for discharge at Port Sudan. Numerous calls were made to the General Manager of Triple S Shipping Capt. Mahanaga and to the co-director Mr. Wickramarachchi for crew wages, but they dodged each call by not answering the phone or replying to messages from the Ship’s Captain email messages.
En-route to Port Sudan, the charterers informed the vessel on the 5th of November that the vessel is to be handed over to M/s. Ocean Base Security for the initially intended security operation. The white security officer who was sailing on the ship ordered the captain to stop the ship in mid sea and await fresh orders. With the diesel fuel quantity on board now being a bare minimum and also considering the danger of a blacked out ship dangerously floating a midst a busy shipping lane, the Captain exercising his authority decided to proceed to Sudan for safety. Vessel anchored off Port Sudan four days later.

Incommunicado:
After anchoring, the Charterers suspended all communication with the ship for reasons known only to them. The Captain who was desperately in need of fuel, water and provisions was left helpless with a very angry crew. Again the vessel was blacked out at this anchorage to conserve the little diesel they had. The Captain who desperately needed assistance then decided to contact the Director General of Merchant Shipping in Sri Lanka under whose authority the ship was registered and also the ships owners M/s. Ceylon Shipping Corporation Ltd of Sri Lanka. During this time a representative of the International Transport Federation (ITF) office in London also contacted the ship to check on the situation on board. Around the 20th of November the ships situation was reported on the Sri Lankan media and this resulted in a call from the Charterers but this contact was of no avail to anyone.

Medical Needs Ignored and USD 50 worth of food for 32 Men:
Due to the immense stress experienced on board with almost no fuel, water or operational pumps or kitchen cookers the Chief Engineer fell sick with high blood pressure. The Sri Lankan media had reported that the Chief Engineer had experienced a heart attack and this caused chaos with the families in Colombo. After a lapse of two weeks, a bunker barge supplied just 10 metric tons of diesel fuel and food to the value of US$ 50 to the ship at the anchorage. With a crew of over 32 persons on board (including 05 sea marshals) this food was sufficient only for one and a half days. Finally the vessel berthed in Sudan on 22nd afternoon and 100mt of fresh water was supplied.
No food was supplied till the next evening. The chief engineer was taken to consult a Heart Specialist who advised immediate repatriation but no heed was given by the Charterers to this message as well. Crew wages were again requested but there was no positive response from the charterer who kept on giving various promises of payment which was never met.
During this time in desperation, the families of the ship’s crew contacted the International Trade Federation (ITF) representative in Sri Lanka asking that the crew be sent home even without wages as the conditions on board were appalling. This too was exposed in the local media but the charterers (Triple S Shipping) did not move to help. The vessel was finally instructed to sail to Jeddah in Saudi Arabia where the ship was told that all crew wages would be settled and the crew repatriated home. At this time most crew members opted to go home except for three who opted to continue sailing if monies were remitted. These crew members who opted to stay were very young and junior cadets who would have lost their jobs with black marks against their names if they had requested to go home.

Deteriorating Machinery on Board:
During this time the ships machinery was deteriorating very badly as there were no spares or lubricating oils on board. The Owners too were informed of this situation. Out of the three main diesel generators on board, one generator was out of commission due to damage to the turbo charge since 16th October, 2012. No spares were supplied. If this deficiency was disclosed to the ships classification society or to the insurance the vessel would not have been able to sail at all until it was repaired.
Having sailed from Sudan with various unpaid invoices to supplier’s, the vessel arrived in Jeddah and was again instructed to stay at anchor. In Jeddah part payment of crew wages was made with promises of the balance being paid in Sri Lanka and most crew were repatriated to Sri Lanka.
These false promises of the charterer which were guaranteed by the Director General of Merchant Shipping of Sri Lanka have never been met up to date.

Powerful Connections Silence The Monitors:
The Director General of Shipping took little action to support the crew at this time of need but joined hands with  Dr Senerath to find fault with the ship’s captain and the crew. With Dr Senerath having very high connections to the highest of the land, no ministry official was apparently prepared to lose his job by interfering in to this episode. They all remained silent for fear of being pulled up by senior officials. Shockingly, although the ship was registered under this ministry and was carrying the Sri Lankan flag no ministry official has even called the ship to find out what problems the ship had.
The crew were paid a part of the balance of wages about 02 months after their return and to date the final amounts still remain unpaid.
A new crew under the present Captain Capt. N. Anuranga Gulawita – whose maritime conduct has been questioned by those in the industry – sailed with a cargo of steel for the South African peninsula. Again due to low fuel on board the vessel kept drifting for over 20 days approximately 60 nautical miles east of Maputo. The ship later arrived and anchored off Durban port in South Africa and berthed at Maydon Wharf in Durban on 17th May to discharge a cargo of steel.

Selling Scrap To Pay For Food:
Since the crew has not been paid their wages for almost 03 months, the matter was reported to International Transport Federation, Durban and a court case for the arrest of the ship was registered. A US$ 68,000 award for the crew was determined by the court. During this time, due to no food being on board a few crew members sold waste scrap iron to earn a little money to buy food. The Charterers who flew into Durban to settle this court case forced the ship’s captain who was now a pawn they were holding to report to the police that ship’s steel was sold. 13 crew members ended up behind bars for two days until ITF intervened and got them released justifying the fact that waste scrap iron was sold to collect money for food.

Allegations of Intimidation against crew:
On their release, the crew was taken to the ship where they were alleged to have been threatened by Dr Senerath (vehemently denied by Dr Senerath) and forced to sign blank forms agreeing to a withdrawal of the court case related to non-payment of wages. Due to this enormous clout and power this Dr. Senrath carries he has again in no uncertain terms threatened the crew to fly home to Sri Lanka where all dues would be met. Once this crew arrives in Sri Lanka, several members of the crew have told their families in Sri Lanka that it is likely that Dr Senerath will use all his clout and all available means to keep these crew members silent with no monies paid.

An unseaworthy vessel:
Over and above this detention of the ship, the South African Safety Authority (SAMSA) has also detained the vessel due to her un-seaworthy condition. All ships Trading Certificates, most Officers’ Competency Licenses have been found to have expired, with the ship’s bow having a dangerous large hole making it unsafe to go to sea. Also one non functioning  diesel generator is a major cause for detention. The ship on arrival at Durban has officially declared that her last port of Call was Maputo. There is evidence to prove that this ship did not enter or leave Maputo. She went close to the Maputo port pilot station and collected a few bottles of drinking water and a few sacks of provisions supplied thro a small boat. Ships are normally supplied fresh water by the ton where this ship collected water by the bottle. This way the charterers got away from paying any port charges if she had to berth for providing husbandry.

Unpaid Monies to Shipping Corporation:
The Ceylon Shipping Corporation (CSC) has issued Triple S Shipping with a Letter of Demand seeking the recovery of monies due to them. The letter was sent in March this year. Subsequently the CSC has also formally asked for the return of the vessel. No official responses have been received from Triple S Shipping although a number of discussions have been held between Dr Senarath and Chairman CSC Kanchana Ratwatta. A highly placed source at the CSC revealed that since making a down payment at the beginning of the Charter agreement, little else has been paid. An initial payment of Rs 10 Million was made plus two further monthly payments. Triple S Shipping agreed to pay the CSC a sum of USD 1,000 per day as part of their Charter agreement. They also agreed to share equally the costs of Dry Dock repairs. Dry Docking was scheduled for March this year but due to all these ‘troubles’ has not been done. It is not clear, says the CSC, as to when these matters can be attended to. Originally the CSC entered into a maximum 5 year contract but had the proviso to claim back the vessel by giving appropriate notice. Triple S Shipping had similar rights to return the vessel. Whilst Dr Senarath disputes an amount of Rs 43 Million, our sources at the CSC reveal that Rs 43 Milliion is a ball-park figure and could be accurate with a 10% margin of error ‘at the most’. In spite of allegations that ‘nothing has been done’ to collect or enforce return of the vessel, the CSC have in fact initiated action to recover monies and the return of the vessel to their custody.

A Change of Flag:
Highly placed sources reveal that Triple S Shipping sought verbal permission from Ceylon Shipping Corporation and the Director of Merchant Shipping to change the flag of the ship which has been turned down by both parties. It could be a good exercise to visibly observe whether the Lanka Mahapola still flies the Sri Lanka flag.
Further the Ceylon Shipping Corporation’s 2nd container ship the ‘Lanka Muditha’ was up for sale as scrap iron. Dr Senerath having not paid more than two charter payments to the CSC has made the highest bid offer to purchase the Lanka Muditha for scrap. The transparency of this bidding process is being questioned by those in the maritime industry.  The fortunes of the Ceylon Shipping Corporation Ltd replicates with its part-time Chairman & a ‘virtual’ Executive Director in place. The CSC have for long been on a downward trend like with every government institution ignoring Circular 415, the CSC is on its way to oblivion or privatization according to maritime sources.
Kanchana Ratwatta, chairman of the CSC said that the CSC has initiated action to recover dues but could not give a specific amount as ‘the calculations’ have to be done.

Update:
Seaclad Maritime in South Africa expected that the wages issue would be resolved on Friday 8th June and that the vessel will then undergo essential repairs. Dr Senarath estimated that the ship would have its certificates and be available for sailing within ‘one week’

Kanchana Ratwatte, Chairman CSC Says…

Q        Why are you allowing a private shipping company to operate a ship which belongs to the state without paying hiring charges for over two years?
A:         The contract started in June 2010 – it’s less than two years. The Charter party paid an advance of Rs 10 Million based on a rate of USD 1,000 per day. It is worth noting that generally the life of this type of vessel is 20 years. However the vessel was kept in service beyond that and used in the war effort. Thereafter it was decided by the Cabinet of Ministers to sell it. In the meantime we were approached with an offer for this present Charter at USD 1,000 per day. To berth a vessel – it will have to be kept out harbor – the costs are likely to be USD 5,000 per day. So whilst we await valuations and then advertise and receive offers we will be incurring costs of at least USD 150,000 per month. Getting a vessel back is one matter, we have also got to consider the financial implications. In terms of getting back what is due to us in terms of the payments we have initiated a process which is now in arbitration. The nature and limited scope of this market means that this vessel would have been attractive only to someone starting up as opposed to a shipowner already having other vessels.

Q        What action have you taken to ensure the safe return of the ship to Colombo when the hire charges have not been settled for such a long time?
A: The terms of a Charter means that the Charterer is responsible for all such matters including safety issues. The payment matter is now in arbitration and we are bound to follow the terms we agreed with the Charterer. If the Charterer does not adhere to the safety issues the vessel will not be allowed to sail out of Durban. Again the hire charges are now in arbitration.

Q        What action have you taken to ensure the ships certificates are valid and the condition of the ship is maintained for the ship to be seaworthy?
A: These are matters for the Charter party. We have now formally asked for the vessel back. Thereafter the decision of the Cabinet will be implemented but these matters do take time and there are procedures that must be followed.  The Director General of Merchant Shipping is also very much involved and we have also informed the Sri Lanka High Commission in South Africa to look into the interests of the Shipping Corporation. The safety issues are the responsibility of the Charter Party and if the Surveyor finds faults the vessel will not be allowed to sail until these matters are put right.

 

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I Took On A Really Bad Ship – Dr Sanjay Senarath

We contacted Dr Sanjay Senarath of Triple S Shipping. He confirmed that monies had been transmitted to Durban to settle the wages issue and was hopeful that within a week essential repairs would be carried out and estimated those repairs around USD 50,000. Dr Senarath also denied that Triple S Shipping owes the CSC Rs 43 million and stated that ‘we have a revolving agreement. We have the financial resources to pay. I have many bank accounts and other assets. It is wrong to say that we can’t pay. Of course we can. I took on a really bad ship and with time I can resurrect this and provide employment and be of service. It does not help when wrong information is put out. The CSC just sat there for all these years now after I enter into an Agreement they are suddenly awake.