September 3, 2003	Wednesday	Rajab 5, 1424

KARACHI, Sept 2: The oil spill of more than 30,000 tons of oil from the broken and half sunk ship Tasman Spirit has raised the compensation liabilities for the insurance companies.

Insurance surveyors are reported to have indicated recovery of over 32,000 tons of crude oil. This recovery too carries a price tag of 40 per cent of the initial oil cost for the six Pakistan-based insurance companies and their reinsurers.

Insurance sources now estimate cost of the oil cargo at about Rs900 million. Total loss suffered in the mishap now cost about Rs650 million. Bulk of the compensation payment will come from the foreign reinsurers.

Efforts are now being made to ensure quick compensation payment from the six Pakistan-based insurance companies so that process could be initiated for seeking early payment from the reinsurers.

Insurance sources say that surveyors are expected to finalize their report in next few days on loss of oil cargo in the open seas and cost of the recovery of oil from half sunk ship.

The six insurance companies that have booked marine insurance business of the 67,500 tons of Iranian crude oil on the ship are Central Insurance 23.5 per cent, Eastern Federal Union 21.5 per cent, Adamjee 20.9 per cent, New Jubilee 17.6 per cent, Habib Insurance 11.5 per cent and New Hampshire 5 per cent.

These insurance companies expect their reinsurers to make prompt compensation payment of their loss claims. But these companies fear that reinsurers will offer harsh conditions and raise premia rate when they will seek renewal of their treaties from next January.

Reports suggest that oil spill has also caused substantial damage to the marine life and has literally crippled domestic fish and shrimp trade in Karachi.

The fish exporters and Export Promotion Bureau still claim that for them the business remains as usual even after more than a month of oil spill from the broken and sunk ship.