Hiiraan Online

Following the successful introduction of armed guards aboard several merchant ships plying the waters of the Gulf of Eden and the East African coast, Martin Reith, the founder and former chief executive of the Lloyd’s of London insurer Ascot Underwriting, has taken the protection business one stage further with his plans for a Convoy Escort Programme, which will complement the overstretched naval forces in the region.
According to the Times newspaper, “Financial backing estimated at around $30 million, could be up and running as early as this summer.”

As such, the measure could be a good gamble as piracy off the Somalia coast is estimated to have cost the international shipping industry as much as $12 billion.

The investors are hoping that once the funding is in place, they will buy around seven secondhand naval patrol vessels; the money will also help to finance the armed security guards that will be on board.

“As well as four crew and eight armed security personnel, each vessel will have inflatable speedboats or ‘ribs,’ that could be launched into combat if pirates threatened ships,” the Times report said. “The escort programme has already identified the boats that it wants and has a manufacturer for its ribs.”

The reason for the idea is simple. The astronomical nature of insurance costs mean that shipowners can pay an additional $40,000 to $50,000 for each vessel they send through the Somali coastal region.
The naval protection fleet plans to charge a flat fee in three bands based on the speed capabilities of the boats they are accompanying.

The fee, which is about $30,000, will be slightly less than prevailing costs and should reduce significantly any other insurance premiums that an operator might pay.

Once the private fleet is operating, the programme hopes to buy a further 11 vessels, enabling it to run 16 day to day and have a further two in reserve. At full strength, the patrol boats could accompany about 470 ships a month through the Gulf of Aden, equivalent to about 25 per cent of the traffic that plies the vital shipping lane.

Sean Woollerson, a partner in the marine, oil and gas division of Jardine Lloyd Thompson, an insurance broker that negotiates war risk and kidnap and ransom cover, who backs the project, denies the plans are for a “private navy.”

“This is not a navy,” he said. “What we’re trying to be is a deterrent force. Prevention is within our reach.”

The backers of the idea have stressed that it complies with maritime law. They say it will observe the International Maritime Organisation conventions, such as the Safety of Life at Sea treaty.