Infrastructure projects are beginning to see growth again after a quiet period. From the middle of last year, there has been a noticeable increase in such projects, especially in the Middle East, North Africa, the US and Asia.
Infrastructure projects are becoming attractive again to investors as people look to get some sort of return for their money, with the recent focus on power plants and refineries, both oil and chemical.
The project challenge: On time and on schedule
The big challenge associated with large-scale infrastructure, power plant and industrial projects is bringing assets online and on schedule, and so the management of the marine and transit risks becomes crucial. Moving oversize, expensive, ‘one off’ or bespoke shipments into extremely complex settings, markets and jurisdictions is a challenge. It is even more of a challenge to ensure that this is done on schedule.
Delay in start-up
Many infrastructure projects involve the transportation of key components, and any delay in their arrival can have major cost
implications. Insurance plays a key role here, ensuring that if there is a problem, claims can be resolved quickly and effi ciently, thus minimizing delays. Marine Delay in Start-up (DSU) cover, a form of business interruption, is increasingly in demand from project owners/investors, and is also a requirement from many lenders where the project relies on finance.
Seamless cover
Large infrastructure projects often involve a range of insurable risks. There may be a supply element, a property element, a
marine transit element, business interruption, construction all risks cover, and then initial start-up and operation. Increasingly
companies are looking for seamless cover, providing protection from the earliest stages of the project through completion.
For large projects like this, it makes sense to have a global insurer involved that can provide coverage running across different insurance lines, such as DSu, marine and construction.
Integrated teams
The insurer’s job is, of course, to provide risk transfer, to identify and manage risks, and to provide global claims services. This requires not only an insurer with a global presence, but also one where underwriters, risk engineers and claims specialists all work
together as an integrated team. Only a handful of insurers in the marine sector have dedicated marine risk engineering personnel
– most of them use surveyors.
Marine underwriting, claims and risk engineering teams cannot operate in isolation and should work closely together as a unit, not separate entities. This can lead to an effi cient workfl ow and relevant risk improvements. The value of such integrated teams is particularly important when the insurance requirements of a project involve a range of risks in different geographic locations.
The benefits of integrated teams for customers
- A single point of contact for the customer.
Claims are dealt with quickly and efficiently so that supply chains aren’t interrupted and projects aren’t delayed.
- The ability to share information: claims information is vital for risk engineering to identify where problems lie and how mitigation measures can be best applied.
- Ensure that claims protocols are in place from the start.
- Underwriting can refl ect the risk engineering efforts of the customer.
- Improved policy terms and recovery prospects.
The Sasol-Huntsman project
One of the leading chemical Maleic Anhydride producers in Europe, Sasol-Huntsman, expanded their production capacity in order to meet growing demand for their products.
key component was a new chemical reactor that was manufactured by MAN DWE in Germany, also a Zurich customer.
The reactor had been built at MAN DWE’s factory in Deggendorf, Germany, and was to be transported 600 kilometers, by water and road, to the Sasol Solvents Site in Moers also in Germany. The two-week trip was not a typical, everyday transportation of goods. The reactor had a diameter of nine meters, a height of eight meters, and weighed 570 tons – which is equivalent to 350 saloon cars!
Delivering a key component The challenge was not only to ensure that there was no damage to the reactor, but that it arrived at the plant on time. The reactor was a key component and without it the new capacity would be unable to begin production, representing a major business interruption and putting Sasol-Huntsman’s significant investment at risk.
Considerable risks
The risks were considerable – the loading and unloading procedures were particularly critical due to the enormous weight of the reactor. Risks during the transportation included possible damage to the reactor, or even a total loss. Time delays during the trip would cause the customer to suffer potential production losses and if the reactor were totally destroyed, the production of another reactor would take another two years. Zurich provided Erection All Risk, Marine Transit, and Delay in Start Up cover for the project, as well as risk engineering advice for the transportation of the reactor.
Successful transportation
The transportation comprised a 600-kilometer trip via various rivers including the Danube, the Main-Danube Canal, the Main, the Rhine, and then, after a two-week trip, it was loaded onto a truck to be taken to the Moers plant with a police escort. The reactor arrived safely, undamaged and on time, and the new capacity remained on schedule to start production on time.
See the video and full story on
http://www.zurich.com/globalmarine/
