Bloomberg News

Italy Ends Search Inside Stricken Ship as Fuel Removal Delayed

February 01, 2012

Jan. 31 (Bloomberg) -- Italy’s civil-protection agency halted a search for 16 missing people in the submerged part of Carnival Corp.’s Costa Concordia, whose owners are likely to declare a “total loss.”

Rescuers will keep searching for bodies in the part of the ship above water, the agency said in a statement on its website today. The ship is unlikely to return to use and insurers will probably “declare a total loss,” Pier Luigi Foschi, chairman of Costa Crociere, the Italian unit of Miami-based Carnival, said during a hearing in the Senate in Rome today.

Preliminary operations to prepare fuel removal are likely to remain suspended tomorrow as strong winds are forecast, the agency said. Royal Boskalis Westminster NV’s Smit Salvage unit and its Italian partner Neri SpA haven’t started pumping 500,000 gallons of fuel out, more than two weeks after the accident.

The Costa Concordia hit rocks and capsized on Jan. 13 just hours after leaving port near Rome with 4,200 passengers. Oil removal may take at least 28 days, Coast Guard Admiral Ilarione Dell’Anna said on Jan. 23. Italian search teams found a body on Jan. 28, raising the death toll to 17. Removal of the stricken ship from the area may take 10 months, civil-protection agency head Franco Gabrielli said on Jan 29.

Carnival said yesterday that the Concordia wreck will hurt 2012 net income by as much as $175 million, including insurance deductibles and loss of use. Foschi said today that his company is “very solid in terms of capital,” which it has built up over years without paying dividends.

‘Worried’ About Image

“We aren’t worried about the insurance coverage, what we are worried about is the damage to the image of the company,” he said in the Italian Senate. “We have enough funds to cover loss of ship as well as the claims and costs linked to the accident.”

Carnival’s Italian unit reached a damage-settlement agreement with consumer groups last week as the company was sued in Miami and Chicago. Insurance costs for the accident may reach $1 billion once environmental damage and injuries are tallied, Moody’s Investors Service said on Jan. 23. Most of the losses will be incurred by reinsurers, Moody’s said.

Italian consumer-law group Codacons and New York law firm Proner and Proner filed a suit against Carnival in Miami on Jan. 27. The plaintiffs are seeking $460 million in compensation, Proner lawyer Mitchell Proner said during a webcast press conference today. The complaint names six plaintiffs, he said.

Concordia’s Captain Francesco Schettino was placed under house arrest on Jan. 17 for allegedly causing the wreck and abandoning the ship. Bruno Leporatti, his lawyer, has said the captain didn’t abandon the ship and wrote in a Jan. 16 statement that his actions saved many lives. Prosecutors in Grosseto, Italy are interrogating Roberto Ferrarini, head of Costa Crociere’s marine operations department, as a witness today, Foschi said.

Costa Crociere yesterday presented a plan to remove debris and other waste, the civil-protection agency said. The ship may be righted by using balloons, though that’s “extremely difficult,” Foschi said on Jan. 16. He didn’t rule out carving up the cruise liner.

--With assistance from Chiara Vasarri in Rome. Editors: Jeffrey Donovan, Andrew Davis

To contact the reporter on this story: Marco Bertacche in Milan at mbertacche@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net


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