Corporate Boats & The Chance To Enjoy
Sydney Morning Herald
Wednesday November 13, 1991
TREAT an invitation to lunch or dinner on board a corporate boat with respect. Such invitations are becoming a rarity in these tough economic times
In the past two years, the size of Sydney's corporate fleet has shrunk. And a small number of the remaining boats owned by well-known companies never leave their moorings.
Although corporate boats can perform the key role of entertaining important clients, particularly those from overseas who tend to be most impressed by Sydney Harbour, there is a concern among larger companies that the craft may be seen as an indulgence during the recession.
It also seems that not as many local business people are finding the time to accept invitations for an afternoon on the water.
If these aren't enough worries for corporate boating, the Maritime Services Board (MSB), and boat charter operators, are applying additional pressures.
The MSB is administering a law that, in essence, requires corporate boats and their crews to meet so-called "survey" standards. Company-owned boats, according to the board, must have the same levels of construction, safety equipment and trained staff as charter vessels.
The board says this law applies to any boat used for business purposes, such as entertaining clients, even though these passengers are not paying for their passage.
However, a number of corporate boats were not built to these standards. And this may lead to more companies disposing of their craft.
It is believed that a number of charter operators make representations to the MSB whenever corporate boats that are not of survey standard are sighted with a load of grey-suited executives enjoying themselves on the Harbour.
The remaining corporate boats on Sydney Harbour - called "the survivors among a dying breed" by one executive - include Fleetwing (Boral), Lionheart(Brierley Investments), Mary D (Comalco), Galatea (HongkongBank), Any Seas(NEC), Emma (Nelson Tobacco), Sundowner (Pratt Industries) and Tarquin(Westpac).
Pioneer International has a small motor cruiser that is apparently seldom used.
These boats range from relatively modest vessels, such as Comalco's 57-foot Mary D, to Nelson Tobacco's lavishly fitted, 90-foot Emma. The HongkongBank has magnificent 80-foot yacht, Galatea. This three-masted, classic vessel is one of the few corporate sailing boats. The vast majority are motor launches.
The Lowy family of Westfield Holdings owns one of the grandest motor cruisers on Sydney Harbour. It is said to be worth between $3 million and $4 million. A Westfield spokesman says the boat is used only for personal purposes by the Lowys.
The majestic 90-year-old steam yacht Ena - restored by one-time oil magnate Mr Pat Burke and stockbroker Mr Rene Rivkin - lies at anchor off Berry's Bay on the Harbour's northern side. The scene of some splendid parties when the economy was last riding high, the Ena is unused and in the possession of a mortgagee.
Mr Burke and Mr Rivkin spent at least $2.5 million, some unconfirmed reports put the amount as high as $6 million, restoring Ena to her lateVictorian glory. She had been then used to entertain groups such as 60 members of the stock exchange at one function.
Passengers have included businessmen Messrs Kerry Stokes, Peter Briggs and Alan Bond.
However, Mr Burke put Ena up as a security for a $1.9-million loan, unconnected with Mr Rivkin, and the mortgagee Societe Generale eventually took possession.
Despite Sydney Harbour providing ideal waters for corporate boating, some of the most palatial craft have been built for use in other States by since failed entrepreneurs.
Mr Christopher Skase used to entertain business associates on board the baby blue $6-million Mirage III.
It was built to his specifications by one of Australia's most-respected builders of luxury craft, the now-failed Lloyds Ships. And Mr Bond had a series of incredibly large motor boats - the final one he ordered was about 170-feet long.
Sydney's corporate craft are moored at marinas as far apart as Rushcutters Bay, in the eastern suburbs, and Akuna Bay in the north.
Comalco's Mary D is moored at a marina in Mosman Bay and picks up passengers from Walsh Bay in the City. Boral's Fleetwing is kept at the same marina in Mosman Bay.
Nelson Tobacco's Emma is moored in Shell Cove in Middle Harbour. Over at Birkenhead Point, there are the HongkongBank's Galatea and Pratt Industries'Sundowner. Westpac's Tarquin is moored on the end of a marina in the mouth of Snails Bay, Balmain, and NEC's Any Seas is at The Spit.
A number of companies are sensitive to any questions about their nautical activities.
Executive Money was abruptly ordered to leave one craft having accepted an earlier invitation to step on board. However, this was apparently a misunderstanding and the company later became extremely helpful.
Boral politely declined to comment about Fleetwing after checking with its managing director. And Pioneer International said the only person who could talk about its boat was the chief executive, Mr Rodney Price, but Mr Price did not return our calls.
The few large companies willing to talk to Executive Money about their corporate boats say their vessels are used strictly for entertaining clients and staff functions - and not for the private entertaining of senior executives and directors.
Comalco, for instance, entertains the major clients of its various divisions on board the Mary D. Each division is allocated a number of days use each year and shares the running costs on a user-pays basis.
Pratt Industries' chief, Mr Richard Pratt, is known not to step aboard his company's Sundowner unless to talk with clients.
Whether or not a company gets value for money from a corporate boat depends largely on the number of times the craft is used.
Both Pratt Industries and Comalco say their boats are in great demand during summer. Sit-down lunches and dinners serving 18 or 19 people are quiet common on Comalco's Mary D during the week and on weekends at this time of year.
The annual cost of keeping a 50-foot motor cruiser (about the average size of a corporate vessel in Sydney) is probably about $60,000 a year, excluding major repairs.
The major regular cost is the captain's salary. Large companies with corporate craft usually employ a full-time captain who has the responsibility for supervising maintenance. Additional crew are hired on a part-time basis when needed and outside caterers supply the food.
As a general guide, a company's annual bill for a 50-foot craft may comprise captain's salary, say, $40,000; mooring at a marina near the City, $12,000; shipyard charges for slipping once a year, $300; payment to shipwright or mechanical engineer to apply anti-foul on underside of craft during slipping, $800; fuel for travelling 100 hours a year, $3,000; engine servicing, $300; and insurance, say, $5,000 on a boat worth $500,000(insurance is about 1 per cent of value).
A new 50-foot motor cruiser will cost, perhaps, $800,000 to $900,000. The price of a second-hand boat depends so much on the particular craft. For instance, boat broker Sydney Campton at Birkenhead Point Marina is selling a 60-foot, seven-year-old motor cruiser for $650,000 and a 46-foot, eight-year-old cruiser for in excess of $400,000.
While the purchase costs may seem high, a number of the companies, such as Comalco and Pratt Industries, have owned the same boats for many years.
The only tax attraction in buying a corporate boat perhaps would appeal most to smaller companies in which the directors also are the shareholders. The boats can be bought with undistributed - and therefore untaxed - profits. (This article has concentrated on boats owned by well-known companies.)
A partner with accountants Price Waterhouse, Mr Geoff Lehmann, says a company cannot depreciate the purchase cost of a boat used for entertainment and cannot claim tax deductions for maintenance costs, including a captain's salary.
Most companies wanting to entertain clients or launch products on Sydney Harbour, of course, will charter a luxury craft.
Freyja Charter, which operates a 72-foot motor cruiser from Mosman Bay, names Time Life, Potter Partners, HiSoft Computers, Lend Lease and AGC among its regular corporate customers.
Miss Fay Stringfellow, manager of Freyja, says that the cost depends on the number of people, the menu selected and time of year.
Freyja's top menu - served during the high season of November and December with only a dozen guests - would cost about $300 a head, a total of $3,600. Compare this to a much-more modest menu for 100 people during the rest of the year for about $65 a head, a total of $6,500. Unlimited liquor is included in these prices.
Sydney executives have revealed a rather romantic side to their natures in the naming of their craft. Westpac's Tarquin carries the name of two semi-legendary kings of ancient Rome. Brierley investment's Lionheart is probably named for King Richard the Lionheart and the HongkongBank's Galateo shares her name with a sea nymph from Greek mythology who was loved by Cyclops Polyphemus.
© 1991 Sydney Morning Herald