In line with previous reports, this report contains an update of all previous cost investigations undertaken by the Commission within its market monitoring exercise.

The methodology of these cost investigations has been described in the first two shipbuilding reports and is not repeated here. The approach is continuously refined and results appear to be very close to the real situation.

As shipbuilding projects take significant time to be completed, and actual costs may change until delivery of the vessel, the cost investigations have to be based on forward assumptions. These assumptions are continuously reviewed and results are updated whenever new or better information is received. This is reflected in the table below. The reference to the shipbuilding report in which the particular order is covered should be used to see the details of the order investigated. As the Commission's market monitoring progresses, ship orders previously investigated and now completed can serve to verify the cost modelling. So far, none of the cost investigations has been found to deviate significantly from the factual costs of production.

　

The abbreviations used refer to the following Korean shipyards:

　

DHI: Daewoo Heavy Industries

　

DSME: Daewoo Shipbuilding and Marine Engineering

　

HHI: Hyundai Heavy Industries

　

HMD: Hyundai Mipo Dockyard

　

HHIC: Hanjin Heavy Industries and Construction

　

SHI: Samsung Heavy Industries

　

The shiptypes appear as listed by Lloyd's Register.

　

For container ships the container carrying capacity in TEU (Twenty-Foot-Equivalent-Unit) is indicated, with ships above 5000 TEU falling into the category of the so-called Post-Panamax container ships.

　

LNG carrier stands for Liquefied Natural Gas carrier.

　

ULCC stands for Ultra Large Crude oil Carrier, VLCC for Very Large Crude oil Carrier.

　

The terms Aframax, Suezmax, Panamax and Capesize indicate certain standard dimensions and specifications for tankers and bulk carriers, respectively.

　

Comparison of reported order prices and calculated construction prices for selected new shipbuilding contracts (update August 2002)

　

Since the fifth shipbuilding report seven new cost investigations have been undertaken.

　

These concern the following orders placed in South Korean yards:

　

- Capesize bulk carrier (series of 3 plus 1 option), 26250 cgt, to be built by HHl

　

- Product tanker (series of 6), 19200 cgt, to be built by HMD

　

- Product tanker (series of 3 plus 4 options), 24880 cgt, to be built by STX Shipbuilding Co. (ex-Daedong)

　

- Product tanker (series of 2 plus 2 options), 24879 cgt, to be built by STX

　

- Capesize bulk carrier (series of 2), 26250 cgt, to be built by Samho Heavy Industries (ex-Halla)

　

- 2500 TEU container ship (series of 5 plus 5 options), 18972 cgt, to be built by HHI

　

- Liquefied Product Gas carrier (LPG) (plus 1 option), 14521 cgt, to be built by STX

　

The results of these cost investigations are summarised below.

　

　

These results confirm the findings from previous reports. Korean yards continue to sell ships at prices below Ml costs of production. As prices for ships from Korean yards have been lowered further in the reporting period, while costs of production have increased, the gap between contract price and normal price is widening. For the latest investigations this gap is 18% on average (not weighted), while it was 8% for the new cost investigations summarised in the fifth report.

　

The results also confirm that certain yards, such as HMD, operate more carefully than others. It should be noted that Samho (ex-Halla) and STX (ex-Daedong) were among those yards going into receivership after the Asian crisis of 1997/98.