On the 27 February 2010 an earthquake measuring of 8.8 on the Richter scale struck the southern regions of Chile. This was followed by two tsunamis which had particularly devastating effect in the Talcahuano Bay area bringing destruction to its associated port and shipyard facilities. These events led to a wreck removal operation covered by the Club.
The vessel concerned, a five hold handysized bulk carrier, was in a traditional style graving dry dock at the time. The passing of the two tsunamis caused the locality of the dock to flood to a height of approximately 1 to 2 meters above the surrounding quay. The ship gained sufficient buoyancy to move bodily forward which, as the waters receded to sea level, left the ship aground. While its stern post remained within the dry dock, the bow extended over the top edge of the forward dry dock wall by a distance of approximately 22 meters (ashore). In this condition the ship had a trim of approximately 16 meters by the stern. Two of the holds and the engine room flooded, the latter with an oil and water mixture presenting a potential pollution threat. The hull and machinery underwriters declared the ship a constructive total loss and abandoned any proprietary rights in the wreck.
At the same time that notice was received of underwriters’ abandonment, advice was also received that the Chilean Authorities viewed the ship a wreck and its owners were under a legal obligation to remove and dispose of it, particularly in light of the pollution hazard the ship now presented. The costs to remove the wreck fall within Club cover and in close consultation with the Club, owners set about complying with this obligation.
The first step was simply to evaluate properly the condition and circumstances of the ship and a marine consultant was engaged for this task. The ship was found to be stable, resting firmly on the forward edge of the dry dock in way of its number one hold, but in addition to the engine room being flooded through the open sea chests and stern tube, holds five and three were also found to be partially flooded. Some 242 tonnes of bunkers in the form of heavy fuel oil were found in the number two double-bottom tanks. The block work of the dry dock at the point of contact showed signs of abrasive damage and the shipyard expressed concerns that further damage may occur during the removal process. As a protective measure, a consulting civil engineer was engaged to evaluate the damage known to have been caused by the earthquake and tsunami and the possibility that further damage might arise during the re-floating operation.
One aspect of this detailed evaluation revealed that the ship was not presenting an immediate danger and, despite the presence of bunkers on board and free oil in the engine room, there was time to consider a number of re-floating options.
The owners decided to put the job of re-floating the ship and its final disposal to competitive tender. The Club assisted in drawing up an invitation to tender which included amongst other things the requirement to submit a detailed re-floating methodology outlining specific measures to be taken to avoid pollution and further damage to the dry dock structure. Emphasis was placed on the need for prospective contractors to evaluate the status of the ship and obtain its technical data from on-site inspection.
Pricing was to be on a lump sum “no cure, no pay” basis and the BIMCO standard form Wreckfixed99 was chosen as the basis of the contract to be awarded. This was adopted because the ship presented a relatively straight forward re-floating operation and permitted the contractors full opportunity to formulate detailed plans for the operation. Although unexpected problems can always be encountered, this was one of those rare occasions where this probability was much reduced and, in any event, clause four of the contract permitted the contractor to renegotiate or terminate the services in the event there was a material change in the status of the vessel or work site.
A difficulty contemplated by the owners at this stage was that having taken re-delivery of the ship, they would then have the task of disposing of it, preferably realising any residual value to offset against the cost of re-floating. An option of scuttling the ship offshore as a fish haven was considered as a last resort but this would merely have added to the cost of its disposal. Scrap price indications were proving disappointing and the substantial distance from traditional demolition sites meant estimated towage costs were making significant inroads into any scrap value added to which the ship remained in the owners’ possession and therefore at their and the Club’s risk. Relying upon the expertise of the salvage contractors in this field, the invitation to tender included an invitation to provide a solution for the ship’s final disposal, including an invitation to the contractor to take possession themselves, thereby relieving owners of the problems associated with disposal.
Several tenders were received of varying methodologies, scope and pricing. The owners retained a marine consultant to evaluate the proposals and a short list was quickly established. Further opportunity was given to the prospective contractors to review their tenders with emphasis on options to take possession of the ship on its re-floating. It was the most attractive proposal in this respect that proved to be the successful bid.
In drawing up the contract terms, an area in which an owner needs to proceed with caution is the work scope description. This is box 7 of the Wreckfixed99 form titled “Nature of Services”. Failure to encompass fully the contemplated work scope may give the contractor an opportunity to seek additional remuneration. Although the work scope description has to be addressed on a case by case basis, words and phraseology of general and wide meaning are preferred.
Having awarded the contract, the successful bidder immediately set about removing the onboard bunkers and closing the various openings in the ships hull above and below the water line. A steel ramp was built underneath the forward part of the ship that was extending shore side of the dry dock edge and large inflatable roller bags were positioned between the ramp and hull to permit easy movement of the ship as it was pulled astern by tugs. Protective timber work was placed to avoid masonry damage to the dry dock itself should the bow of the ship “flop” down as it came free of the dry dock edge. This all proved unnecessary as the removal of the bunkers and additional flooding of the engine room meant the extreme trim of the ship was maintained and it effectively floated free of the dry dock edge as it was pulled astern. Once the vessel was stabilised in a more conventional hydrostatic condition, the contractor took full possession of the ship concluding the contract and the wreck removal liability. No additional damage to the dry dock was identified.
As discussed above, the contact was concluded on the BIMCO Wreckfixed99 standard form. Currently, BIMCO are conducting a review of the Wreckhire99 form and the International Group is participating in this review. Although a final form has yet to be adopted, areas of potential change will see the introduction of a bonus and penalty scheme on a sliding scale, the opportunity to reduce rates should a job prove easier than contemplated at its commencement, an extension of the knock for knock provisions to include sub-contractors and enhanced definitions and extra cost provisions.
