Our Director Derek Munro has recently shared his approach to a new build yacht process with The Superyacht Buyer Report. Derek breaks down a complicated process of building a new yacht into 9 simple & manageable steps and gives us an insight of things to look out for during the new build process.
At Divergent Yachting we believe the process of deciding to build a yacht and the build phase are made up of nine simple steps.
Although simple, it is important that the first 6 stages (which are all pre-build works) are dealt with in some detail, therefore making the final 3 stages far more enjoyable.
STAGE 1: STATEMENT OF REQUIREMENTS
To construct a large new yacht, it is essential to have a clear statement of the Owner’s requirements. Key features and performance criteria will all determine the design, price range and the most suitable shipyard. Therefore, the personal input of the Owner and their team at the very earliest stages of a project are most important.
What kind of yacht do they want, where do they want to go, how fast, how many guests, what sort of toys do they enjoy using and envisage storing on their yacht, plus much more will be the basis for the design and the specification.
STAGE 2: CONCEPT
For most Owners, this step is very exciting. This is where the vessel’s shape and form are drawn, and their vision starts to become reality.
The Client should find a Designer that they like and trust, who can appreciate and develop the Client’s desires whilst considering the practicalities of operating a vessel at sea and in charter. Or has the Client seen a yacht from a specific designer or shipyard that they like? Are they after a production yacht, a semi-custom yacht or a fully custom vessel? They all require a differing amount of input from the Client team.
STAGE 3: SPECIFICATIONS
If a fully custom design is the preferred choice of the Client, then developing a detailed specification for use to tender yards is imperative. Therefore, the use of experienced Owner’s representatives, engineers and naval architects is important at this early stage.
If a production or semi-custom yacht is the Client’s preference, then the shipyard concerned will have a specification which will need to be reviewed and where required or wanted, items modified for approval by the yard. Normally, there is some discussion and negotiation if changes are made to the yard’s specification in these cases.
STAGE 4: REVIEWING AND SELECTING CAPABLE SHIPYARDS
Superyacht Owners often prefer a particular shipyard based on brand recognition or their previous experience.
A full review of all capable shipyards before issuing invitations to tender is paramount.
Can they offer the correct security (financial, insurance and physical)?
Do they have the right team for your yacht project?
Do they understand the Client’s ultimate goal, ethos and use of the vessel?
Do their past projects reflect the quality expectation of the Client?
What is the availability to start works and deliver on time?
STAGE 5: TENDERING PROCESS (FOR FULLY CUSTOM BUILD PROJECTS)
The tendering phase relies on the commercial knowledge of the people approaching the selected shipyards.
Ensure you have the right tender package and issue it to suitably qualified and experienced shipyards.
Have a legal team which understands yacht / ship building contracts.
STAGE 6: CONTRACTUAL NEGOTIATIONS AND SIGNING
This process can take some months overall.
This crucial phase can move quickly, so manage the process carefully, keeping everyone informed of progress. Aligning the build specification with the yacht building contract is vital, even under the pressure to sign the contract. A small change could easily add unacceptable time and costs to the build phase.
To reduce the risk of problems later, ensure the Owner’s team, the shipyard and a marine lawyer experienced in large yacht construction contracts work closely together.
STAGE 7: CONSTRUCTION PHASE
Get your Owner’s representative and technical support in early on site.
Owner’s Representation includes commercial management of the contract to cover the build schedule monitoring, Stage payment signoffs and delay claim negotiation. The Client should receive monthly reports on progress and required input from all parties (Owners Supply Item designs and delivery etc).
Technical support includes selecting Owner’s supplied sub-contractors, managing interior outfitting, and inspecting the full build process such as welding, pipework, cable installation, equipment installation and paintwork.
STAGE 8: SEA TRIALS
This is often the most exciting stage of the shipyard phase.
The Client, their Team plus Captain and crew get to test and experience the years of effort for the first time.
All the sub-contractors and suppliers involved in the build are usually represented during the sea trial to ensure that all systems are operating optimally.
Depending on the vessel, a sea trial can be a day or a few days if a complex vessel.
STAGE 9: ACCEPTANCE AND DELIVERY
The Client with their Representative, Lawyers and Shipyard finalise the details of Acceptance and Delivery.
This includes listing any works still outstanding and planning for the Warranty phase.
A Memorandum of Understanding is agreed regarding outstanding works, if there are any that still need completing.
The vessel is registered and handed to the Client.
For a copy of a full article, head over to The Superyacht Buyer Report magazine here.