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 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200080003-4

annually to foreign shipping interests than are earned by the domestic-flag fleet, there are substantial deficits in the balance of payments in seaborne transportation. In 1969, the deficit amounted to US$184 million.

In November 1972 the merchant fleet consisted of the following 649 ships of 1,000 gross register tons (g.r.t.) and over:

Additional data on the ships are as follows:

Italian-flag ships are employed in liner (scheduled) and tramp (unscheduled) service on major trade routes worldwide, carrying the nation's own trade as well as crosstrades cargo between other countries.

Merchant vessels are owned by more than 160 domestic and beneficial owners (entities which take the from operations). Fourteen beneficial owners, controlling more than 200,000 d.w.t., account for about 60% of the total fleet deadweight tonnage. Out of these owners, Archille Lauro, controls about 1,254,000 d.w.t., and six others each have more than 400,000 d.w.t. under Italian registry. Finmare (Societa Finanziaria Marittima), a government-owned holding company, owns majority shares of Societa per Azioni di Navigazione Lloyd Triestino (23 ships, 177,377 d.w.t.), Societa per Azioni di Navigazione Italia (17 ships, 161,176 d.w.t.), and Societa per Azioni di Navigazione Adriatica (14 ships, 34,318 d.w.t.). Foreign beneficial owners are Standard Oil Co. (New Jersey), New York (seven tankers, 419,412 d.w.t.) and Blue Star Lines, Ltd., London (five refrigerator ships, 17,482 d.w.t.).

Between 1 January 1969 and November 1972 the fleet increased by about 2.6 million d.w.t. During this period, shipowners concentrated on both a structural and technical modernization of their fleets. Many obsolete and unprofitable ships were scrapped or sold, and a significant number of specialized ships were acquired, specifically roll-on roll-off/trailers, liquefied gas tankers, and chemical and tanker/ore carriers.

The relatively slow growth of the fleet carrying capacity during the last few years can be attributed primarily to insufficient capital for investment by many private, unsubsidized shipowners in the development of their fleets. Shipowners have been hampered by continually rising costs in several important areas of their shipping operations as well as increasing costs of ship construction.

While other nations have been phasing out or limiting passenger ship service because of strong competition by air travel, Italy has been increasing such operations and acquiring luxury passenger liners. However, the state-owned Finmare shipping group, which provides most of the the fleet's passenger service, has sustained heavy losses during the past few years, particularly in transatlantic and transpacific passenger operations. In 1970, Finmare announced proposals for restructuring operations of each of its companies. These proposals concerned primarily the discontinuance of the more profitable cruise and cargo-carrying services. Finmare's proposals, which have not had government-wide approval, have been vehemently rejected both by the strong maritime unions, who fear a large displacement of seafaring personnel upon the discontinuance of certain passenger lines, and by private shipowners, who feel they would be in direct competition with the government through Finmare for the carriage of certain trade on the same routes.

In 1970 the government estimated that the volume of annual Italian seaborne trade would amount to about 500 million metric tons by 1975, and in an effort to increase the fleet's participation in the carriage of

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200080003-4