Somalia piracy cost approached USD7bn in 2011

WASHINGTON: Somali piracy cost the world nearly US$7 billion in 2011, including more than US$2 billion for military operations, armed guards and equipment to protect ships, a monitoring group said on Wednesday (8 February 2012).

The US-based Oceans Beyond Piracy said 80% of the cost is borne by the shipping industry with the remainder covered by governments.

It said the most notable cost was $2.7 billion in fuel to allow ships to travel at higher speeds through high-risk areas, followed by $1.3 billion for military operations and $1.1 billion for armed guards and security equipment.

Another $635 million are attributed to insurance, $486-680 million are spent on re-routing vessels along the west coast of India, and $195 million on increased labor costs and danger pay for seafarers, it said.

The average ransom paid climbed to $5 million in 2011 from $4 million in 2010, but total ransoms amounted to just $160 million in 2011, accounting for just two percent of the total cost of piracy, according to the group.

Pirates operating from Somalia - which has been without a central government for two decades - carried out 237 attacks in 2011, more than half the world total, the London-based IMB Piracy Reporting Centre said last month.

Source: AFP