According to reinsurer Munich Re, the overall insurance loss from the accident could surpass €830m. As much as half of that may be swallowed up by the cost of the salvage operation.
“I think now it’s the most expensive wreck removal operation in history,” said Rahul Khanna, a senior marine risk consultant with the shipping insurance arm of Allianz.
“We have our fingers crossed on it and we just hope that this is a success because if it is not, I don’t even want to think what the financial consequences would be.”
The cost of the salvage operation — which a senior official from the ship’s owner Costa Cruises this week estimated at €600m “and rising” — is already expected to be greater than the value of the vessel itself.
That compared with other complex salvage operations like the MV Rena, a huge container ship which sank in New Zealand in 2011, whose salvage costs are estimated at around €180m.
The sheer scale of the Costa Concordia, a vast floating hotel which was carrying more than 4,000 passengers and crew when it went down, make the recovery one of the most complex ever attempted.
Lying on its side on a rock shelf just outside the harbour mouth, the 114,500 tonne vessel is the length of three soccer pitches and appears almost as big as the Tuscan port where it was holed and sunk with the loss of 32 lives on Jan 13 last year.
A multinational team of 500 salvage engineers has occupied the island for most of the past year, stabilising the hulk and preparing for the start of the lifting work, which is expected to begin at 4am on Monday.
If all goes as planned and the weather remains fine, a 12-hour ‘parbuckling’ operation will see the ship rotated by a series of cables and hydraulic machines, pulling the hulk from above and below, and slowly twisting it upright.
“The size of the ship and her location make this the most challenging operation I’ve ever been involved in,” said Nick Sloane, a South African with three decades of experience, who is leading the project for contractors Titan Salvage.
Once upright, the ship will be stabilised before eventually being towed away to be broken up for scrap. Alternative approaches, such as breaking the ship up on the spot, were rejected as too complicated.
Coincidentally, the operation will take place on the same day as the annual conference of the International Union of Marine Insurance in London. “And as you can imagine, there’ll only be one subject of conversation,” said one industry executive.