In a few years time, it may be possible to experience the beauty and grandeur of the legendary Titanic ocean liner not only via books and films but by seeing it up close. An Australian billionaire has teamed up with State-owned ship builder CSC Jinling Shipyard Co in Nanjing, East China's Jiangsu Province, to build a replica of the ship.

Australian mining tycoon Clive Palmer told the Global Times via e-mail Tuesday that the two sides are "going through the final contract process," and they expect to see the ship embark on its maiden voyage from China to Southampton in 2016.  

The replica will be as luxurious as the original, Palmer said, with 840 rooms and nine decks. But it will be four meters wider to maintain stability, which should allay people's fears of the ship heading to a watery grave like the ill-fated original in 1912.

Titanic II is also seen by the Chinese side as a way to move into the high-end luxury liner market, which could offset the decline in orders for cargo ships amid the sluggish global shipbuilding industry.

Shrinking orders

In 2012, the volume of new orders for Chinese shipbuilders reached 20.41 million deadweight tons, according to data from the Ministry of Industry and Information Technology, a 43.6 percent decrease year-on-year. And the number of backlog orders fell by 28.7 percent from 2011.

Domestic shipbuilders also suffered growing overcapacity last year due to the stagnant global shipping industry, with some private firms facing a risk of closing, a member of staff who wished to remain anonymous from the PR department of CSC Jinling told the Global Times on February 18.

He added that the company had performed fairly well in 2012 compared to its domestic peers, but refused to reveal any details of its financial results.

However, a source close to the company told the Global Times Wednesday on the condition of anonymity that the company is relying heavily on previous orders and that it saw a fall in new orders just like other domestic companies in 2012.

During the golden period for domestic shipbuilding in 2007 when demand was strong, CSC Jinling was not available for new orders for the next three or four years, but now they could accept new orders at any time, he said, noting that they got around 90 new orders in 2007, compared with 23 in 2012.

Another State-owned shipbuilder, China CSSC Holdings, predicted a sharp decrease of between 95 percent and 100 percent in its net profits for 2012, according to a statement filed with the Shanghai Stock Exchange on January 12.

James Leake, managing director of US-based ICAP Shipping Research, was quoted as saying by Norwegian weekly newspaper TradeWinds on December 24 that 38 percent of Chinese shipyards did not receive any new orders in 2012, and 10 percent will have no ships to deliver in 2013.

New growth area needed

China's shipbuilding industry is unlikely to recover until 2015, said Li Sheng, general manager of Shanghai-based HIT Marine Co. "This will force domestic shipbuilders to seek new growth areas, such as high value-added ship building, which is currently dominated by European firms."

The construction of Titanic II will be a good way for the company to break into the lucrative luxury cruise ship sector, according to the PR staff member from CSC Jinling.

More domestic shipyards should try building luxury cruise ships, as they could bring more profits than cargo ships, Li told the Global Times Wednesday.

Many shipbuilding firms, especially State-owned and listed ones, are eager to move into the high value-added ship sector. But a key barrier they face is the fact that buyers in the sector generally prefer to have ships built by established firms in Europe, according to Li.

The current average cost of building a luxury cruise ship is around $1 billion, more than twice the average cost for a bulk carrier, which is still the main product for Chinese shipbuilders, he said. Li also estimated that Palmer will put $600 million into the Titanic II project.

CSC Jinling declined to offer an estimate of the cost of building the Titanic II when contacted by the Global Times Wednesday, saying that the design has not yet been finalized.

As well as the potentially higher profits, building the Titanic II could also allow the company to develop advanced technologies and gain similar orders in the future, Liu Wei, an industry analyst with the China Shipbuilding Economy Research Center, told the Global Times Tuesday.

Potential difficulties

Even though the benefits from building the replica Titanic are clear, there are also potential difficulties, given that nothing like it has ever been built before by a Chinese firm, but the two sides are devoting great efforts to the cooperation, said the CSC Jinling PR staff member.

Building a luxury liner requires the most advanced technologies and the installation of interior facilities is not easy either, said Liu, adding that only European firms have mastered such skills so far.

Palmer called the project a tribute to the spirit of the men and women who worked on the original Titanic.

"It will be every bit as luxurious as the original Titanic," equipped with deluxe cabins, swimming pools, gymnasiums and libraries, he said, "but it will have state-of-the-art 21st-century technology and the latest navigation and safety systems."

Besides the technological challenges in the building process, CSC Jinling also needs to shift its workers' attitudes toward ships, from seeing them as transportation tools to craft that will be people's home on the sea, said Li. The company has focused on building cargo ships for nearly 60 years, but building cruise liners will require even greater attention to safety and the stability of the ship.

However, both sides expressed their confidence when contacted by the Global Times.

"We will be able to replicate the Titanic successfully with assistance from our foreign partner. A panel has been formed for the preparatory work," Ge Biao, factory director of CSC Jinling, said at a news conference in Hong Kong on February 16.

Palmer said that he has "a long standing relationship" with CSC Jinling, which "has also been commissioned to build four 64,000 deadweight ton bulk carrier ships for another one of my other companies, Queensland Nickel."

He also noted that 40,000 people around the world have already shown an interest in bookings for the Titanic II's maiden voyage.