• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Raja Simhan T.E.

CHENNAI, March 20

WITH the US having begun attacks on Iraq, the chartering rates of foreign flag vessels have shot up even as underwriters abroad have imposed the war risk surcharge, an additional burden of about 20-25 per cent on vessel charters.

However, there has been no change in chartering of Indian flag vessels as of now as the Indian insurance companies have not hiked or imposed a war risk surcharge.

Most of the Indian flag vessels are insured with Indian insurance companies, the Director, Shipping Corporation of India, Mr Sudhir S. Rangnekar, told Business Line on Thursday.

According to him, some of the underwriters abroad announced the surcharge 12 hours before the US gave the 48-hour ultimatum to Iraq.

Another immediate repercussion of the war would be increased fuel oil charges, which accounts for 25-30 per cent of a vessel's operating costs.

The tanker vessel charges would also dip substantially, he said.

The cost of war insurance for an oil tanker in Kuwait valued at $40 million rose yesterday to $200,000 a day, up from $100,000 the previous day, an official of Ascot Underwriting, a unit of Lloyd's of London was quoted as saying in the New York Times.

"We hope that it will be a 10-12 day war, which would not affect the shipping fraternity. However, if the war prolongs, it would be a disaster for Indian shipping," Mr Rangnekar said.

The war would, however, create an opportunity for the shipping industry even as more bulk commodities including steel and cement would be transported towards the Gulf once reconstruction begins, he added.

Article E-Mail :: Comment :: Syndication

Stories in this Section
IA hikes fares by 15 pc

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line