The performance-based agreement is valued at €900 million, and provides for shared financial incentives and exposure based on outcomes for both parties. The expected revenues for 24 months (approximately €150 million) will be included in Wärtsilä’s order book for 1Q17. As the contract will be effective commencing 1 April 2017, the expected revenues for 2017 are €56 million.
Under the terms of the agreement, Wärtsilä will handle all engine maintenance and monitoring work for 79 of Carnival’s vessels, and ongoing planning will be a collaborative effort between both parties.
The agreement includes Wärtsilä’s Dynamic Maintenance Planning (DMP) and Condition Based Maintenance (CBM). These services are based on capturing digitalised data streams from each engine, after which the data is analysed by specialists. The enables real-time equipment optimisation, while predicting both operational and maintenance requirements. With DMP and CBM in place, vessel and fleet operations are optimised, and engine overhaul intervals possibly extended. Approximately 400 Wärtsilä engines are covered under the agreement, and so even minor improvements in vessel fuel consumption can lead to significant fleet operational costs.
Bill Burke, the Chief Maritime Officer for Carnival Corp., said: “Our agreement with Wärtsilä extends our cooperation to a strategic partnership.
“With Wärtsilä maintaining vessels under our agreement and ensuring a high level of safety and reliability, we can concentrate on our core priority – providing great cruise vacations for our more than 11 million annual guests. In addition to reducing our costs, the long-term agreement increases safety and operational efficiency – two critical advantages in the fast-growing cruise market.”
The long-term performance-based agreement model provides predictability of costs and incentives for parties as renumeration is based on how to equipment performs, with the companies sharing exposure based on outcomes.
Pierpaolo Barbone, President, Services & Executive Vice President, Wärtsilä Corp., said: “We are very excited to develop our long-term partnership into a more strategic direction. Both Wärtsilä and Carnival Corp. are committed to investing significantly in this partnership as well as to develop our cooperation in the long run. We are confident that working closely together, we can improve performance in both organisations.”
Under the agreement, Wärtsilä claims that it will continue to focus on making further improvements in energy efficiency, and that this will be a key driver for cooperation between both parties. Both fuel consumption and engine efficiency will be regularly measured, with improvements to fuel efficiency based on continuous monitoring and data analysis.
Read the article online at: https://www.lngindustry.com/small-scale-lng/25012017/wrtsil-and-carnival-sign-agreement-on-cruise-ship-safety-and-reliability/