Costa Concordia: Twenty-One Months of Salvage and Counting, Insurers On Edge

By MarEx 2013-09-13 14:15:00

Salvors have confrmed that the parbuckling operation to lift the wreck of the Costa Concordia upright will begin on Monday, September 16th, weather permitting. The cruise ship, christened in July 2006, is 952 feet long with a beam of 116.6 feet wide, and is 114,137 gross tons. It is owned by the Carnival Corporation and its subsidiary Costa Crociere.

On January 13, 2012, under the command of Captain Francesco Schettino, the huge cruise ship grounded with about 3,229 passenger and about 1,000 crewmembers at 9:45 p.m. in calm seas. Thirty people were killed and two passengers are still missing and presumed dead. 

The parbuckling lift operation will use an integrated engineering design of cables and hydraulics to upright the ship after more than 21 months of laying starboard in the shallow waters beside Giglio Island near Tuscany. 

Raising the Costa Concordia is estimated to be about a 15-20 hour operation including more than 500 salvors and engineers. They have already pumped about 18,000 tons of concrete into bags below the sideways superstructure. A massive underwater platform has been built to allow the ship to come to rest on it after the jacks and cables pull the vessel upright.

When salvage teams begin hauling the wrecked Costa Concordia liner upright next week, the financial stakes for insurers will be almost as enormous as the awe-inspiring feat of engineering. According to reinsurer Munich Re, the overall insurance loss from the accident could surpass $1.1 billion. As much as half of that may be swallowed up by the cost of the salvage operation.

The cost of the salvage operation, which a senior official from the ship's owner Costa Cruises this week estimated at $800 million "and rising", is already expected to be greater than the value of the vessel itself.

The sheer scale of the Costa Concordia makes the recovery one of the most complex ever attempted. Engineers are confident the parbuckling project will work, but there is no 100 percent guarantee that nothing will go wrong.

"The size of the ship and her location make this the most challenging operation I've ever been involved in," said Nick Sloane, a South African with three decades of experience who is leading the project for contractors Titan Salvage.

Cruise ships have traditionally been among the safest vessels, but the insurance industry has faced a growing challenge from a new breed of superships like the Costa Concordia and the monstrous new bulk cargo carriers that have emerged with the rise in global trade volumes. Insurance underwriters have grappled with the new risk profile presented by the massive new ships and considerable attention has been focused on the cost of recovery and repairing environmental damage in case of any accident.

As the salvage teams in Giglio start their preparations, the experience gained in shifting the Costa Concordia should provide some guide as to how feasible other difficult wreck recoveries may prove in the future.