The Japanese shipyards are aggressively pursuing cruise contracts, posing a greater threat to the European yards, according to delegates at the recent Seatrade conference held in New York.

Although the Japanese yards do not have any cruise ship orders to date, NKK is building a new 1,800-passenger ferry for North Sea Ferries and along with IHI was in the running for Sitmar's two new ships.

The Japanese have the technology to compete with the Europeans, according to spokespeople from several of their yards. They just need some orders to prove it, they said.

"We don't have any contracts because we don't have the experience," said a spokesperson at Hitachi-Zosen. "But we think we can break into the cruise industry. We have done a lot of research, and we have the advanced technology."

"The Japanese have the potential for superiority in the field of naval architecture and marine engineering, and the ability to deliver superior work in areas such as stability/weight control, speed performance, and energy conservation," a spokesperson at IHI said. "We may not have had sufficient experience, but in the past several years, we have gradually caught up with the Europeans by visiting ships and shipyards, and consulting with architects and designers at various levels."

A spokesperson at NKK added that his yard also has engaged the help of Norwegian and American designers, and over the last 10 years, has acquired the knowledge and capabilities to build cruise ships.

The biggest barrier to Japanese entry appears to be in the area of financing.

"We can't offer the subsidies that some of the European governments do," the representative from NKK said. "But we can get trading companies and private interests together to offer competitive and more attractive financing."

The strong yen is another obstacle, according to the spokesman from IHI.

Nevertheless, the Japanese are optimistic that they can overcome these barriers.

"In the very near future, we will be very competitive in all aspects -­ quality, interior design, and even price, " said the spokesman at NKK. "The European yards will not be able to subsidize all of the projects, and we will be able to offer attractive alternatives."