January 21, 2018
Monday, June 9, 2014

Argentina’s Río Santiago Shipyard engaged in a flurry of projects

Buenos Aires Province Governor Daniel Scioli (centre front) speaks at the launching of the Eva Perón oil tanker — the largest made in the last 30 years in Argentina — in July 2012. The vessel is being built by the Río Santiago Shipyard for Venezuela’s state-run oil company PDVSA.
By Guillermo Háskel
Herald Staff

The yard spearheading the nation’s shipping industry recovery urges state support to revive the once-flourishing local ship parts industry

Río Santiago Shipyard, Argentina’s leading shipyard, is building or discussing the construction of a number of vessels, among them, oil tankers for Venezuela, several bulk carriers and tugboats and training boats for the Argentine Navy.

Over its 60-year life-span the shipyard run by the Province of Buenos Aires and located in the city of Ensenada, on a branch of the River Plate, some 60 kilometres of Buenos Aires City, has built 67 ships. It also builds metal-mechanic structures, locomotives, train bogies and components for hydro-electric and nuclear plants. Since last year it is diversifying production to manufacture wind turbines with their towers to meet an expected strong increase in demand for non-renewable energy sources in the Mercosur bloc. (See Herald, May 19, 2014). It has a workforce of 3,500.

In an interview with the Herald, ARS interim Commercial Manager Julio Martínez outlines the shipyard’s features and projects and renews calls for state support to rebuild the flourishing ship parts industry which Argentina lost since 1990 when it was governed by neo-conservative Peronist Carlos Menem (1989-1999).


“The shipyard is old. It was designed in 1937 and construction began in 1943 and its structure was planned for vessels of that time, which were relatively long and narrow. With the advent of finite element calculations and optimization on the ship hydrodynamic studies, they became shorter and wider so our slipways have become outdated.” The first major investment made in the shipyard was in the 1970s, when Slipway No. 1 was widened to build ships of the oil company YPF (privatized in 1992 and re-nationalized in 2012), which were the first 60,000-ton vessels made in Argentina.

“The dock is also old. It was built in 1971 by the Tarena company in San Fernando, in Greater Buenos Aires, on the basis of a 1952 draft of the US firm Crandall and has the same problem as the slipways. It is for long and narrow vessels, and has little elevation capacity, which limits the market for repairs that we can access,” Martínez said.


ARS has 3 slipways, each with a specific function. No. 3, the smallest, to build tugboats and small vessels for the Navy, No. 2 to build some large destroyer and the No. 1 designed to build armoured ships. The crane of the outsitting quay has a capacity of 250 tons and it was set at that weight because that was the weight of the tower of battleships.

Martínez said that the shipyard followed a military design, in the first place, considering the weight distribution of the vessels. A warship has the engine-room at the centre. Until the mid-1960s merchant ships had the machine at the centre. Since then, the engine-room started to be taken astern to allow the best part of the ship to hold the cargo. Already in the early 1980 they were being moved toward the poop, thus allowing the shortening of the shaft line, except the oil tankers, which already since 1920 had the engine-room in the poop to avoid the problem of explosions. Then, the charge for which the slipways were built bore the largest weight in the centre.

“The slipways are designed for a different weight distribution than the one we have at present. We need to find projects that fit the slipways we have.”

Slipway No. 1

ARS has a contract with the Venezuelan state oil company PDVSA for two tankers of 47,000 tons each, with an option for two more, for Slipway No. 1.

The first tanker, the Eva Perón went to to the water last year and is in the process of outsitting, whereby vessels are stagnated and construction is completed afloat in a dock, to free the slipways. The second of PDVSA, the Juana Azurduy, is under construction. There is confidence that it will go to the water early next year. The Eva Perón should be delivered between April and May 2015 and the Juana Azurduy in April, 2016.

The project of the four ships for PDVSA was brought by their owner, PROJEMAR, from Brazil. PDVSA had also commissioned the design of four twin tankers of 47,000 tons to Brazilian shipyard EISA, but afterwards it rescinded the contract and continued only with the contract with ARS.

If the option for the two other PDVSA ships is not exerted, the Juana Azurduy, will go to the water and ARS’ Slipway No. 1 will be freed.

If PDVSA makes use of the option for the other two ships, Slipway No. 1 will be busy for some more time, which will allow ARS to develop a project it has been discussing for four bulk carriers of 40,000 tons each, all for Slipway No. 1, Martínez said.

¿How much is a PDVSA oil tanker worth?

That is super-classified information.

Slipway No. 2

For Slipway No. 2 there is an option of two ships of 20,000 tons with an option for two more and then three bulk-carriers of 12,000 tons each. The owner has a lot of interest the slipway is busy. The project which came first is that of the two of 20,000 tons and if for some reason it does not mature or is delayed, that of 12,000 tons would follow.

“Considering the haste of the projects, we will not have the time to develop the two bulk-carriers of 40,000 and 20,000 tons at Río Santiago. They arrived already with the project bought, but the engineering project of the three bulk-carriers of 12,000 tons is being developed in ARS. I started it myself,” Martínez said.

“In principle, they are for the Argentine flag. As ARS is in a free zone, we have a serious bureaucratic problem to build ships for the general customs territory. Sometimes it takes a long time to unblock customs issues. With the five previous bulk-carriers we had no problems because they were for foreign-flagged vessels like the two we are doing now. Then, the materials and equipment are brought in and later on exported and it is as if they had never been through Argentina.

“So far, the bulk-carriers are of Korean origin, with state-of-the-art technology regarding fuel efficiency. Since 2016 we have to meet very stringent regulations of the International Maritime Organization (IMO) regarding an energy efficiency index and to update the vessel designs. The last ship designed at the Río Santiago Shipyard was a tanker of 30,000 tons for the company Trans Ona in 1980.”

Slipway No. 3

For Slipway No. 3 there is a contract to build a 32-metre tugboat. And there are also a number of studies with the Argentine Navy to build four tugboats of 20 metres, two tugboats of 30 metres, two multi-purpose ships (avisos) of 69 metres and four boats for the Naval Academy to train cadets. There is a principle of allocation of budget funds. This project is being done with Tandanor, which is the state defence shipyard.


“We want to continue to build ships for national owners, to continue creating jobs for domestic industry. We must develop a strong ship parts industry like the one we had and that, unfortunately, we lost since 1990,” Martínez said.

“And that development requires money. We have been trying to help develop some domestic suppliers and they made a huge effort but until they put out their product, it all comes to pouring out money. We give them all the support we can but if there is no larger state support, if there is not even credit, it is impossible. Subsidies are needed. We don’t have economies of scale. We also need to encourage parts manufacturers to integrate into Mercosur.

“The shipyard has to be an industry of industries. We must not believe that we must be able to build everything, but to outsource, the same way automakers do. Before, we had workshops which made prefabricated bathrooms, hatch covers, etc. The modular bathrooms we now buy from Korea were in the past made in Valentín Alsina, in Greater Buenos Aires. The accommodation ladders were made in San Fernando,” Martínez added.

Do ships continue to be designed at drawing boards?

Vessels ceased to be drawn on boards since the 90s, when Argentina missed the train. Since 1990 they began to be drawn with computers.

After a series of bulk-carriers shipwrecks in 2000, a year in which 18 vessels and over 500 lives were lost internationally, classification societies joined efforts and began investigating the reasons for the shipwrecks, Martínez said.

Since the sinking in 1912 of the Titanic, an international convention for the safety of life at sea was agreed upon and, since 2000, Common Structure Rules (CSR) were adopted for all bulk carriers over 90 metres long and oil tankers over 150 metres. The 10 leading classification agencies apply the same rules strictly.

What was the cause of losses of the bulk-carriers?

“Material fatigue. While ships sailed under normal conditions, they were loaded and unloaded with large mechanical systems. But then, to optimize the use of the vessels, the owners began diminishing the weight of the hull, and the thickness of the plate, and terminals began to increase the capacity of loading and unloading, none of which was accompanied by the vessel design. The ship needed a large ballast capacity to compensate efforts. Originally, the worst design condition was when the ship was sailing. Since the revolution in maritime traffic, the more serious condition now is while the ship is in the port, because the stresses to which they were subjected while loading and unloading were greater than when sailing,” Martínez said.

Then, from the implementation of the CSR, we had to adjust the time of ballasting and un-ballasting to match the pace of loading and unloading. In addition, studies on resistance to fatigue had to be intensified. A series of ladders and walkways were added to conduct close-up surveys to detect cracks.

“In addition, holds cannot be painted with dark colours but clear ones, to help detect rust and cracks. And manufacturing tolerance was lowered significantly to half of the thickness of the plate. We built the Santísima Trinidad frigate for the Argentine Navy. There was a sector that had a command system for missile radars which was very tough, because the manufacturing tolerance was 6.5mm. Thirty years ago a difference of 6.5mm was corrected with a sledge-hammer. Now, that difference means that the entire block is rejected. Formerly, a bulk-carrier was a relatively fast, simple, and easy-to-build ship but after those 18 shipwrecks things changed completely. Shipyards have to make a great effort in terms of manufacturing tolerances and welding sequences, especially to meet the quality requirements imposed by classification societies and ship-owners,” Martínez added.

“Also, before, you began drawing and sending partial plans the classification societies. Now, they demand that you load the entire ship design in a finite element programme, and analyze strains and the programme makes a grid (malla) of the whole ship with known geometric figures, each of which has a node at its end . This means that programmes must sometimes solve 20 million equations with 20 million unknown quantities.”

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