Home ›› 14 Sep 2022 ›› Front
Bangladesh is yet to decide the fate of the missile-hit ship MV Banglar Samriddhi that still remains in war-ravaged Ukraine. Authorities are unsure whether they should bring it back and recommission it into the fleet following repairs or just let it go.
The decision now depends on which way the Russian invasion of Ukraine goes while the four-year-old bulk carrier is left stuck at the Port of Olvia since February 24 after the war started and Ukraine closed its ports.
If the ship can be rescued from there in the next five months and towed to a shipyard at a safer place, the vessel can go under repair work with money from the insurance company, according to officials of Bangladesh Shipping Corporation (BSC).
But if the process takes more than five months, Bangladesh will have to go through a legal procedure to negotiate the amount. In that case, it would be hard to extract all expenses and scrapping the ship will be the only considerable option, they said.
If the vessel is not brought out of the warzone, the war risk insurer will not be able to send their surveyor to assess the extent of damages as well.
The Bangladesh-flagged ship was damaged during a missile attack on the night of March 2. A crew member named Hadisur Rahman was killed. The vessel was then abandoned and the 28 other surviving crew members returned home safely.
The ship was supposed to take ball clay, a material used in making ceramics, from the Black Sea port of Olvia before travelling to Italy.
Talking to The Business Post, BSC Managing Director Commodore SM Moniruzzaman said that Olvia is now among the high-intensity conflict zones. “It is very risky for the salvager to go there since the area is near Crimea, where intense fighting is ongoing.”
“The ship, however, is okay now. It’s anchored and hasn’t been hit again,” he added.
Asked if they have any plan to scrap Banglar Samriddhi, he said they have claimed a constructive total loss from the insurer and for that, they will have to wait for five more months as the loss assessment takes a one-year cycle to complete.
“At the moment, we think we will be able to repair the ship with the money from the insurance company. But if the war prolongs further, we will be in trouble,” he said, adding that they are still paying the insurance premium.
“We are maintaining communication with the insurer and working the diplomatic channel to make some progress with the help of IMO [International Maritime Organization]. We are also trying to use a third-party organisation to negotiate and bring the ship out of the warzone,” said Moniruzzaman.
“We will tow the vessel to a nearby shipyard for repairs and add it back to the fleet. That’s the plan for now,” he said.
According to Reuters, BSC has sought $22.4 million from the insurance company. The war risk cover was provided by state-owned Sadharan Bima Corporation (SBC) and reinsured through Lloyd’s of London broker Tysers. SBC’s exposure was 10 per cent with Tysers covering the remaining 90 per cent.
Ships typically have P&I insurance, which covers third-party liability claims including environmental damage and injury. Separate hull and machinery policies cover vessels against physical damage. This is in addition to war risk cover.
In June this year, after BSC placed a report on Banglar Samriddhi’s latest state, the Parliamentary Standing Committee on Shipping Ministry had asked the ministry to appoint a maritime lawyer to see to the legal issues in bringing it out of the warzone.
BSC had told the committee that repairing the ship would be more convenient than scrapping it.
The report also said that the international consultancy firm AqualisBraemar LOC (ABL), which specializes in marine survey and cost estimation, has been appointed to find out the cost of salvage and repair.
As it is not possible to determine the cost by directly visiting the ship amid the war, ABL has conducted a remote assessment by reviewing various data of the ship, pictures and video footage of the damage and estimated that the repair cost would be $300,0000 and the salvage cost would be $300,000.
However, the ABL report mentions that the salvager is not agreeing to salvage the ship during the war. Under the same circumstances, the insurer is also unable to appoint a salvor.
