Collaboration Key in MV Smart Wreck Removal

Titan Salvage, now a part of Ardent following completion of the merger of Titan and Svitzer Salvage, has completed the removal of the wreck of the cape-size MV Smart coal carrier in South Africa, an especially challenging project due to weather conditions that prevail on the South African coast, particularly during the winter period.

The removal of the vessel, which was entered in North P&I Club by owner Alpha Marine, has been accomplished on time and on budget due collaboration with the South African Maritime Safety Authority (SAMSA), Titan and North.  

On August 19, 2013 the 151,279 DWT bulk carrier ran onto a sand bar shortly after setting sail from Richards Bay coal terminal in a 7-meter Indian Ocean swell. It was carrying 147,650 to of coal, 1,769 tons of fuel oil and 129 tons of diesel.

All 23 crew members were safely rescued and, just a couple of days later, the 273-meter-long ship split in to three parts.

According to North’s senior claims executive Dev Lajmi, “As the vessel’s P&I insurer we immediately started working with SAMSA to ensure that the wreck was properly managed and moved according to their requirements. The priorities were to limit the risk to shipping and to protect the marine environment of Richards Bay, which is home to the humpback dolphin as well as a popular surfing area.”

Dutch salvor Smit Salvage, part of Boskalis Westminster, together with Smit Amandla Marine and South African salvor Subtech Group removed the fuel first − always a consideration after ensuring the safety of the crew − which was achieved without spillage, followed by 10,000 tons of coal slurry in the ruptured no. 9 hold. They then refloated the separated stern section and scuttled it offshore in October 2013. 

Titan Salvage won the tendering process to perform the lightening, refloating and scuttling of the partially buried bow section. The contract was unusual because of the extent to which Titan assumed the operational risks associated with the project, so minimizing the chances of a cost overrun. The bow section was refloated and scuttled in December 2014 and the remaining mid-section cut down and buried at the beginning of September 2015, with rehabilitation of the seabed completed immediately thereafter.

North’s deputy global claims director Mike Salthouse said, “The successful removal of this very large, high profile wreck highlights the benefits that flow from an open and early dialogue with the authorities responsible for managing a wreck site as well as all other stakeholders. The collaboration between North, SAMSA, the South African Department of Agriculture and Environmental Affairs, the Endangered Wildlife Trust, the international salvage team and the International Group of P&I Club’s reinsurers has provided clarity from the outset, enabling an accurate budget to be agreed and adhered to from an early stage.”

SAMSA Centre for Ships - executive head Captain Nigel Campbell said, “The successful conclusion of the operation is a tribute to all parties, government departments, the local municipality, Transnet National Port Authority, insurers and salvors who, by working together as a team, reached agreement on sensitive issues through consensus without having to resort to the courts. It was important to SAMSA that the operation led to a skills transfer to South Africans, especially as operations of this magnitude are fortunately rare occurrences both internationally and domestically. Nobody benefits from incidents of this nature, but it has to be recognized that in excess of $36 million was spent in South Africa during the two years it took to reach completion.”

Under the International Group pooling agreement, North retains the first $9 million of the cost and the balance is shared by the 13 clubs through various reinsurance arrangements. ‘Given the clubs mutually insure 90 percent of the world’s ocean-going tonnage, it is vital to the economic stability of the shipping industry to ensure that major incidents such as the MV Smart are managed as efficiently and cost-effectively as possible,” Salthouse said.

He added that an important success factor was the well-managed transfer of risk to the salvors, such that the world’s shipowners and their reinsurers were not faced with cost escalation during the two-year project. “The collaboration in the MV Smart case has served as a benchmark for the International Group’s large claims working group, which is currently concluding memoranda of understanding with states on the protocols for proper handling of maritime incidents. Three major coastal states, of which South Africa is one, have now signed the document and more are expected to follow.”