Hijackers collecting more per ship - up to Dh38million
DUBAI //Somali pirates are still holding 51 hostages despite a ransom being paid and their ship and fellow crew members released.
Although only eight ships are being held, down from 28 a year ago, the hijackers are collecting several times more per ship - as much as US$10 million (Dh37.7m).
To force ransoms, they call relatives and issue death threats.
The human and financial costs of maritime piracy have spiralled since 2008, as increasingly aggressive thugs face off against sometimes too-conciliatory negotiators.
"They have allowed ransoms to escalate from less than $500,000 in 2008 to more than $10m less than three years later," said Nick Davis, whose security firm, the Maritime Guard Group, has handled negotiations and ship-release logistics.
"The precedent has been set, so it's very late to try to unwind that."
Negotiators representing hijackers tend to open discussions "at a ridiculous sum", Mr Davis said.
The demands for two ships owned by UAE-based companies both started at $10m but have dropped to $2m for the MT Royal Grace, seized last month, and $2.85m for the MV Albedo, captured in 2010.
Negotiators representing ship owners might not know better, or might have instructions to pay more to release the vessel quickly.
Pirates have threatened to kill hostages but rarely do so, as it would remove their bargaining chip.
"They'll stand out on the edge of the bridge wing and fire off an AK-47," said Mr Davis. "But nobody in the world pays for dead people, so it's all propaganda."
A tactic that is harder to address is when pirates keep crew behind even after a ransom is paid, said Commander James Cohen, the officer in charge of the Dubai-based UK Maritime Trade Operations, which liaises with merchant vessels and naval forces.
They then pressure the governments of those hostages to free fellow Somalis. Among those kept are seafarers from South Korea and India, whose navies have detained pirates.
The release of a vessel can cost much more than the ransom itself. Negotiators might charge as much as $2m. Companies such as Maritime Guard Group, that deliver money, either by airdrop or sea, might charge another $250,000.
After that, the ship may require fuel or repairs. The crew may need medical attention, and all of their salaries should have been paid throughout the hijacking.
Ship owners may have lost months of revenue, although those with better contracts will have kept collecting payments for their ship while it sat in pirate hands.
When ship owners have little to gain financially by rescuing ships, their incentive is simply their moral obligation to their employees.
"You have a social responsibility and a corporate responsibility to do the right thing for the crew," Mr Davis said.
Omid Khosrojerdi, owner of the MV Albedo, said his company closed soon after its sole vessel was hijacked.
"There are so many expenditures," he said late last year. "My business life is finished. I am trying [to get the crew] back to their families."
Updated: April 12, 2012 04:00 AM