Leasing an option for new OPVs?

[zone 1]

whats the osvs goldie should we have gone down the line as the Brits have in the river class are they least from the shipbuilder

[Goldie fish]

I dont understand you please use punctuation its hard to see what you are asking

[zone 1]

the river class patrol vessel that are in operation with the royal navy are they not owned buy shipbuilder that built them could NS not try that...

[Jetjock]

There are full stop, comma and question marks availabe on your keyboard and lacking from both your above posts. That is what Goldie was alluding to and I have to agree.

[zone 1]

build a bridge.

[Jetjock]

build a bridge.

First step taken in the punctuation stakes. Well done.

Now for Capitalisation.

Have a peek at this: http://www.urbandictionary.com/defin...Capitalization

You'll get there, don't worry.

[DeV]

the river class patrol vessel that are in operation with the royal navy are they not owned buy shipbuilder that built them could NS not try that...

They could.... but the whole lot would have to go out to tender again!

They were able to get 3 ships into service within 3 years of the contract being signed. They cost a total of £ 60 million (currently € 70 million) to develop & build. That may sound cheap compared to the Niamh but they are smaller, slower and have much lighter armament (but otherwise are very similar in spec to our required specs).

But they make their money on the charter! The extension of the charter, maintenance & logs support contract for 3 vessels for years 5-10 (to guarantee a total of 960 seadays annually) was signed for £ 50 million (approx € 59 million).

The question is? Is it actually cheaper?

1 OPV would probably cost us approx € 40 million over around 3 years. After that we have to maintain it (but we keep the skills within the NS). Based on 2006 figures (and assuming it costs the same to maintain each vessel in the NS fleet (it doesn't as that includes a larger number of older vessels)) maintenance would cost € 2.2 million (that is an all in figure from the VFM report).




So lets do the maths..... say 3 vessels over 30 years (this obviously doesn't take into account crew costs (it does take into account maintenance personnel costs), fuel & provisions etc) - these are basic figures:


NS owned, operated & maintained:

Build cost - Assuming € 40 million each, all delivered in year 1 = € 120 million
Maintenance - Assuming € 2 million per vessel annually = € 180 million
Total = € 300 million over 30 years


Shipyard owned & maintained, operated by NS (over 30 years):

Built cost - € 0
Maintenance (and charter) - assuming € 4 million per vessel annually = € 360 million
Total = € 360 million over 30 years



So the charter option is actually more expensive in the long term!

We could assume our charter & maintenance costs would be higher as VT have no facilities in Ireland so they would either have to set up here or maintenance would have to be under taken in the UK. This would make it even more expensive. This would also increase the downtime by a few days per year.

The major advantage of the charter option is that it would be much cheaper in the short term (the first 5 years for 3 vessels would cost € 60 million as opposed to € 150 million). This of course in the current economic situation would be a massive advantage.

Also don't forget we were able to sell LE Deirdre for over € 240,000.

Unfortually I can't find a price for the option the RN has to purchase the vessels outright at the end of any of the 5 year contracts.

[Goldie fish]

It is like all leases, only cheaper in the short term. Shortly the RN will either have to fork out for their now 10 year old ships or else continue lease, or sell.

I am pretty sure there is a thread all about this type.

[DeV]

They were able to get 3 ships into service within 3 years of the contract being signed. They cost a total of £ 60 million (currently € 70 million) to develop & build. That may sound cheap compared to the Niamh but they are smaller, slower and have much lighter armament (but otherwise are very similar in spec to our required specs).

But they make their money on the charter! The extension of the charter, maintenance & logs support contract for 3 vessels for years 5-10 (to guarantee a total of 960 seadays annually) was signed for £ 50 million (approx € 59 million).

Total = € 360 million over 30 years

Actually just found another source, the contract for the first 5 years was actually the € 70 million (above) and the extension (years 5-10) was € 60 million.

So the total cost of the lease is actually higher (or it may drop for later extensions).

Shortly the RN will either have to fork out for their now 10 year old ships or else continue lease, or sell.

Actually there options are:
- Buy the vessels from VT (the RN don't own them)
- End the contract (ie cease operating them)
- Extend the lease (there was an option to extend the lease once which they did but it doesn't say if their is an option to extend it again!)

[zone 1]

forget leasing then?