Cars lost in last week's cargo ship blaze could cost VW $209m

LONDON/LISBON • The fire on the cargo ship carrying about 4,000 Volkswagen AG vehicles last week could cost the automaker at least US$155 million (S$209 million), according to a risk-modelling company's estimate.

Of the roughly US$438 million in total value of goods on board the Felicity Ace, which went up in flames off the coast of Portugal's Azores Islands, Russell Group said on Monday that it estimates there are US$401 million worth of cars.

VW group had Volkswagen, Porsche, Audi, Bentley and Lamborghini models on the vessel. A VW spokesman declined to comment on the situation on Monday.

Two large tugs with firefighting equipment were expected to arrive on Monday morning to start spraying water together with an initial salvage team that was on board already to cool down the ship, according to a unit of Mitsui OSK Lines.

No oil leakage has been confirmed and the vessel remains stable, the transport company said on a website set up to provide updates on the incident.

Russell Group is modelling the total value of vehicles on board, so its cost projections assume all vehicles were lost, according to a spokesman.

The company estimates auto manufacturers other than VW may have lost about US$246 million worth of vehicles.

A spokesman for BMW AG said none of the company's vehicles was on board, while a Mercedes-Benz AG spokesman said the automaker is not aware of any of its vehicles being on the ship.

Felicity Ace is roughly the size of three football fields. It was on its way to a port in Davisville, Rhode Island, in the United States from Germany's Port of Emden when the fire broke out last Wednesday.

On Monday, a port official said the fire on board the vessel had lost its intensity, probably because there was little left to burn. The 22 crew members on board were evacuated when the ship caught fire.

"The fire has subsided in recent hours," Mr Joao Mendes Cabecas, captain of the nearest port in the Azorean island of Faial, told Lusa news agency, saying there was probably little combustible material left to burn.

Mr Cabecas told Reuters over the weekend that lithium-ion batteries in the electric vehicles were "keeping the fire alive", adding that specialist equipment was required to extinguish it. It was not clear whether the batteries had sparked the fire.

"Our concern has been with pollution since the ship has large amounts of fuel on board and car batteries, but so far there are no hotbeds of pollution," Mr Cabecas told Lusa.

As the fire's intensity ebbs, firefighting teams and technicians might be able to board the vessel to prepare to tow it to either Europe or the Bahamas, he said.

BLOOMBERG, REUTERS