Feral Jundi

Monday, May 14, 2012

Maritime Security: JLT News–CEP Private Navy Will Have Full Funding By End Of Month

Filed under: Maritime Security — Tags: , , , — Matt @ 11:29 PM

This is interesting news and JLT has been fighting to get this funded and operational for awhile now. So it will be great to see this in action. Although a couple of ‘what ifs’ have popped up as I read through the plans.

The CEP is planning to buy seven 150-foot fast patrol boats, understood to be ex-Swedish Navy, and has already earmarked 11 former offshore supply vessels for purchase and conversion.
The ships will be equipped with fast semi-inflatables, called ribs, an array of non-lethal counter-measures, and 0.50 calibre heavy machine guns. They will be operated by a crew of five and carry eight armed security personnel each.
The programme will result in convoys of up to four merchant ships closely escorted by one CEP craft along the IRTC, with additional CEP ships in support, covering east and west-bound traffic.

So this will be 8 armed security personnel covering down on convoys of up up to four merchant ships?  These armed guards will be in small boats to deploy and intercept pirate attack groups?  Ok, so I imagine 1 guard and the commander of the guards will have to remain on the patrol craft in order to guard that and do command and control, and that would leave 6 guys in probably two inflatables (with 3 per craft). So that is two inflatables and one patrol craft to cover down on four merchant ships? Or 2 guys for each inflatable, for 3 craft?

With that kind of force structure, pirates would have quite the juicy target (four merchant ships) with bare minimum force protection (8 guys?). And what is interesting is that pirates usually attack in groups of two skiffs. But there is also precedent for pirates attacking in packs of up to 10 skiffs. (a recent attack with 6 skiffs and 40 pirates was stopped by the Iranians)

So I have to say that this CEP sounds nice, but I question the manpower levels, and especially given the possibility of an attacking force using a swarm.

It might even be worth the investment for a pirate action group to figure out a way to sink the CEP vessel, like using guided missiles purchased on the black market. (thanks to conflicts like Libya)  The reasoning here is that an investment in a couple of missiles, might result in the sinking of a CEP vessel and the capture of four merchant ships that could all bring in about 4 to 5 million dollars a piece. Maybe more if those vessels are highly valuable. So the folks at JLT should know, that a determined pirate force might attempt such an attack because of the potential for profit. Is it wise to just use one CEP patrol vessel per convoy, and especially if it takes awhile for air assets or reserve CEP vessels to show up and help?

The other thing is that JLT is trying to sell this as a cheaper option than guards on boats.  Which is fine, but only assigning one CEP patrol vessel to a convoy of four merchant ships is one of the reasons why they are able to go cheap. I mean ideally you would want enough vessels to cover down on both sides of the convoy. Either CEP vessels that cover port and starboard sides, or aft and  fore of the convoy. That way you don’t have vessels running from one side to the other to repel an assault.

Another point is that what if the one CEP vessel covering down on the convoy, breaks down?  Do all of the merchant ships stop while the CEP vessel waits for repairs? That is another advantage of keeping armed guards on the boats. Perhaps JLT should write into the contracts that in those cases of CEP vessels breaking down, that the armed detail could board the vessels and cover that way so they can continue on with the trip? Who knows and I imagine this stuff has been worked out.

Finally, the other reason why they are pushing for this convoy concept is because it get’s the firefight off of the merchant vessels and out in the open between the CEP and the pirates. That’s so companies can distance themselves from the liability of these types of engagements. It also keeps the firefight away from merchant vessels that have explosive or flammable materials on them. Although with a swarm attack, if a CEP vessel is occupied, then how do they expect to stop other pirate vessels from attacking while they are busy? So pirates will shoot at these vessels anyways, just to signal them to slow down or draw the attention of the CEP boats.

Now one option, that might be more expensive but would definitely cover down on 4 vessels properly, is a patrol craft with helicopter launching capability. Much like the Bob Barker vessel in the Sea Shepard fleet, or the MacArther vessel. Having an eye in the sky to watch over the convoy, as well as engage multiple targets from that helicopter would be an excellent capability. That is owning the high ground!

It’s a numbers game guys, and pirates will take advantage of that. At least with guards on the boat, the advantage is with them because they have the high ground and own a pretty stable platform to fight from. That, and the enemy has to deal with that guard force if it wants to take the ship. With no guards on the boat, pirates could distract and overwhelm the CEP in order to get folks on that boat. The probability of this happening is pretty low, but it is possible.

I am also wondering what is cheaper? Slower vessels with armed guards, consuming less fuel because of a reduced speed, or this convoy model? We will see, and the market of these protection types and the pirates will dictate how this goes.

Also, nice try JLT for trying to dispel this idea that the CEP is not a private navy. lol It certainly is a private navy, that’s unless a government now owns and runs the CEP and will be collecting all of the profit from this venture? –Matt

 

Private navy planned to counter pirate raids
David Black
May 13, 2012
A private navy costing US$70 million (Dh257m) is being set up to escort merchant ships through the pirate-infested Gulf of Aden.
It will comprise a fleet of 18 ships, based in Djibouti, and will offer to convoy merchant vessels along the Internationally Recognised Transit Corridor (IRTC).
This is the world’s most dangerous shipping lane, between the Red Sea and the Arabian Sea. The fleet will be operated by the Convoy Escort Programme (CEP), a British company launched by the international shipping insurers Jardine Lloyd Thompson (JLT) and the Lloyds of London underwriters Ascot.
Full funding will be in place by the end of next month, and the CEP hopes the fleet will be operational by December.
“The shipping industry needs to stand up and be counted,” said Angus Campbell, the CEP’s chief executive and a former director of Overseas Shipholding Group, the world’s second-biggest listed oil tanker company. “The time is now, not in four or five years’ time.”
Piracy in the region is costing the global economy an estimated US$7 billion a year. For the ship owners alone, every vessel sailing through the waters off Somalia is charged additional insurance premiums of between $50,000 and $80,000.

(more…)

Thursday, April 12, 2012

Maritime Security: Jardine Lloyd Thompson Private Navy News…Still Raising Cash

The original intention was to get government or European Union funding for the programme, but when this did not materialise organisers decided to raise the money privately with the aim of forming a profit-making business.
Angus Campbell, chief executive of the CEP, said: ‘It is at a very active stage. We’ve done a lot of groundwork so we are ready when we raise the funds.’ He added: We hope to begin operations in the second half of this year.’
The CEP will buy insurance and use the cover to provide a guarantee to ship owners wishing to travel in convoys under its protection.

And the saga continues….. lol JLT has been doing everything they can to get this private navy concept going. So far, their hopes in getting government funding has been crushed. Which figures, seeing how austerity measures are forcing governments to be more selective with their cash. So now they are going after private investors.

Now what is interesting with their latest selling point is cost.  Check this quote out.

At present, every vessel that sails through the waters in the region of Somalia must pay a massive additional premium on its marine insurance. The extra premium usually amounts to between $50,000 and $80,000, but the CEP intends to charge ship owners from $30,000 to $40,000 for its services.

That is quite the savings, but we will see how it really works once they are funded and underway.  Hopefully they are able to raise the $70 million in their latest scheme, and get this private navy operational. –Matt

 

Insurers in bold plan to raise money to outgun Somalian pirates
By Jon Rees
10 March 2012    ?Convoys of ships with armed escorts could soon be operating in waters infested by Somalian pirates if a planned $70million (£45million) fundraising scheme succeeds.
The Convoy Escort Programme – a proposal from insurance broking group Jardine Lloyd Thompson – aims to raise the sum over the next month in order to equip a fleet of up to 18 vessels to escort convoys of about four ships at a time through the highly dangerous Gulf of Aden and across the Indian Ocean.
The original intention was to get government or European Union funding for the programme, but when this did not materialise organisers decided to raise the money privately with the aim of forming a profit-making business.
Angus Campbell, chief executive of the CEP, said: ‘It is at a very active stage. We’ve done a lot of groundwork so we are ready when we raise the funds.’ He added: We hope to begin operations in the second half of this year.’

(more…)

Tuesday, December 21, 2010

Maritime Security: The JLT ‘Private Navy’ Is Close To Kick-Off

      Woollerson would also like to see it involved in trying to remove the causes of Somali piracy through land-based initiatives.

     “I see the CEP as a self-destructing company. Maybe in many years’ time we will no longer be needed and could donate the tonnage to a Somali coastguard,” he said.

     This is a very interesting quote, and actually the entire article below is filled with some great stuff. Bravo to the author for getting the scoop and putting it out there for all to read. Here are my older posts with comments that first talked about this venture.

     Now for my take on the whole thing.  In order for this Convoy Escort Programme (CEP) to be a ‘self-destructing company’, it must take part in destroying their ‘Raison d’être’ –the pirates.  Escorting ships does not alone create this kind of market mechanism. Especially if they only plan on capturing 27% of the merchant traffic going through the GoA, and allowing the pirates to feast on the other 73% of the merchant traffic. If anything the consequence, intended or unintended, will be a higher concentration of armed pirates attacking undefended vessels.

    The other angle on this is that merchants and insurance companies will see how this works, and they too will fire up a similar business model.  That other 73% of the merchant market might shrink pretty fast with a higher concentration of pirates coming down on them, and an increase of insurance backed protective services available to them at a decent price.

    But this is where the quote up top really grabs me, and that is the land based initiatives of this CEP team.  Could there be something going on here, like JLT taking a hint from what is going on with Saracen International and their proposed private militia? I bet JLT wouldn’t mind attracting some of that funding coming from this middle eastern mystery donor either.

    Finally, there is the quote about a reputable flag state sponsoring these CEP vessels, and the concept of a government and military granting them ‘legitimacy’. That sounds like all the makings for a Letter of Marque or some kind of similar license to do what they are going to do. We will soon find out in the coming months exactly what kind of arrangement we have here. –Matt

‘Private Navy’ Is Close To Kick-Off

December 10, 2010

An insurance broker’s plan to create a “private navy” to combat Somali piracy is close to being launched.

Shipowners could be asked to back the project as early as late January or February with private military-escort vessels sailing alongside merchant ships by mid-2011.

A reputable flag state prepared to register the 18 patrol boats has been lined up, shipowner support is being canvassed and preparations made to secure funding for the vessels and crew.

Sean Woollerson of the Jardine Lloyd Thompson (JLT) insurance-broking group says there are still issues to overcome but the key task of securing government and military support to give the project “legitimacy” is almost there.

The venture, now branded as the Convoy Escort Programme (CEP), estimates it needs only £15m ($23.5m) to buy secondhand vessels suitable for use as patrol boats and the rest of the infrastructure.

Greek salvage entrepreneur George Tsavliris is already seeking support from fellow shipowners and Bimco has indicated a willingness to help facilitate the project.

(more…)

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