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Ceylon Shipping says it was ripped off by China when procuring ultramax pair

Ceylon Shipping says it was ripped off by China when procuring ultramax pair

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An investigation in Sri Lanka has concluded the nation’s state-run shipping line was ripped off by the Chinese in procuring vessels from the People’s Republic.

Ceylon Shipping Corporation claims a pair of ultamax bulkers – the Ceylon Princess and Ceylon Breeze – it ordered in China in 2014 were overpriced and the financing costs were higher than originally agreed upon.

In February 2014 the then Sri Lankan government sanctioned the line to buy two 63,600 dwt bulkers at AVIC International’s yard in Weihai for a price of $35m each. A $70m soft loan with the Chinese government turned out to contain far higher interest rates than originally agreed upon, necessitating Ceylon Shipping to take out an additional $10m loan to pay back the interest.

Ceylon Shipping, which can trace its roots back to 1971, has six ships at present with the two Chinese bulkers at the centre of the investigation the largest and most modern in its fleet.

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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2 Comments

  1. Martin Rowe
    September 4, 2017 at 8:04 am

    Well if they ordered panamaxes and only got delivered ultramaxes they certainly do have something to complain about.

    1. Sam Chambers
      Sam Chambers
      September 4, 2017 at 8:53 am

      Errr, well spotted, sir! Will fix that now!