An ambitious plan to create a shipping industry “navy” to combat Somali piracy is to become more commercial.
The concept of the Convoy Escort Programme (CEP) being a public private partnership is changing to streamline decision making with fundraising to also become commercial.
There has been market gossip that the CEP has hit the rocks but Angus Campbell, the former Overseas Shipping Group (OSG) executive brought in to run the programme, says it is still moving forward but in a somewhat modified form.
The move to turn the CEP into a more commercial venture is designed to cut through the talk and bureaucracy of the political process.
Campbell says the CEP is discussing with three flag states the potential for registering its fleet of around 18 patrol boats.
Each vessel will have a fixed gun position, carry an eight-strong armed security team and two rigid inflatables and charge perhaps $20,000 for a three-day escort
The cost of the project is creeping up from around $50m as vessels and other costs are quantified in more detail but Campbell says an attractive return will be offered to equity providers.
It now looks as if it will be sometime next year at the earliest before the first vessels could be escorted through the Gulf of Aden.
Campbell is chief executive of the project, with Jardine Lloyd Thompson insurance broker Sean Woollerson, who originally devised the plan, as chairman. Angus Wilson, a prominent hull and war underwriter of Marketform’s syndicate 2468 at Lloyd’s, is also a director.
Dobson Ship Management will look after the vessels, the Moore Stephens accountancy group is advising on the CEP’s business plan, while law firms Ince & Co and Holman Fenwick Willan are advising on legal matters.
Ascot Underwriting Lloyd’s syndicate 1414 is providing a war-risks cover that goes with the CEP’s physical protection and they have not decided that only vessels following the industry’s Best Management Practices (BMP) guidelines will be eligible for cover.
The CEP also plans to bundle in perhaps half a day’s crew training from the eight-strong security teams aboard the patrol boats as part of the deal.
“We are still putting the CEP together very actively and making progress. Working on a more commercial model will make us masters of our own destiny and help overcome the obstacles still in our way,” said Campbell.
“The time has never been better for the industry to make a contribution to ensuring the security of it ships,” he added.