Estonia: Port of Tallinn Buys Icebreaking Vessel MSV Botnica

On Wednesday, the Port of Tallinn signed 50 million euro agreement with Finnish shipping company Arctia for the purchase of icebreaking vessel MSV Botnica.

“We are planning to finance the purchase with a short-term loan from a commercial bank,” says Marko Raid, the CFO of Port of Tallinn. In longer term the Port of Tallinn is seeking to refinance the purchase through a loan from the Nordic Investment Bank over anticipated maturity period of up to 10 years.

“This is an excellent outcome for us both and it will benefit the maritime traffic for the whole Gulf of Finland. MSV Botnica is originally built for icebreaking in the Gulf of Finland and we are glad to see that the vessel will continue this work,” says Tero Vauraste, CEO of Arctia. “Botnica has a strong record from the hard winters in Finland and it has an excellent reputation from other seas as well.”

He added that sale of the vessel is part of Arctia´s strategy to find long-term solutions to each vessel of the company’s fleet.

The Port of Tallinn will use MSV Botnica for providing icebreaking services according to a ten-year contract signed with the Estonian Maritime Administration (EMA) on Tuesday. In Estonia, the EMA is responsible for organising icebreaking services. The Port of Tallinn will, according to the contract, provide the EMA with the vessel and crew for that purpose.

It is currently anticipated that MSV Botnica will arrive into Estonia in the second half of December. Pursuant to the contract for 2013-2022 icebreaking services signed between the Port of Tallinn and the EMA, this winter’s icebreaking service begins on January 2nd, 2013. The season lasts until April 20th, 2013. In following years the navigation season lasts between December 20th and April 20th.

The Port of Tallinn acquired MSV Botnica in accordance with the strategic interest of the Estonian State to maintain the navigability of Estonian ports in the Gulf of Finland throughout the icebreaking season. Estonia’s only current icebreaker Tarmo is nearly 50 years old and at the end of its life cycle.

Providing icebreaking services is not the core business of the Port of Tallinn, thus both the Council of the Company as well as the Ministry of Economy and Communications in its role as the representative of the Owner were actively involved in in the decision making process for the icebreaking services contract as well as for the vessel purchase.

According to the contract with the EMA, MSV Botnica will mainly assist ships and convoys in arriving and departing the ports of Muuga, Kunda and Sillamäe, as well as the ports in Tallinn Bay, Kopli Bay and Paldiski Bay.

MSV Botnica is a multipurpose icebreaker built in 1998 by Aker Finnyards in Rauma, Finland. Her ice class is ICE-10, length (LOA) is 97.3 and beam 24.3 metres. The maximum speed of MSV Botnica is 16.5 knots in open water; she can maintain a speed of 8 knots in ice up to 80cm thickness. The maximum ice thickness in which MSV Botnica is capable of maintaining constant speed is 1.2 meters.

Estonia’s only current icebreaker Tarmo was built in 1963. In 2010/2011 season Finnish vessel Zeus and in 2011/2012 Norwegian Vidar Viking were also contracted for icebreaking services. On Pärnu Bay the icebreaking services are provided by EMA’s buoy tender EVA 316, which – on a need basis – has been supported by Estonian and Finnish chartered towboats.

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Port of Tallinn, October 24, 2012