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Shanghai Salvage

Posted April. 14, 2017 07:27,   

Updated April. 14, 2017 07:38


Shanghai Salvage, a Chinese rescue services subcontracted to recover Sewol Ferry, spent a whopping 280 billion won; more than doubling the initial contracted amount at 91.6 billion won. The major cause of the ballooned cost and a three-month delay was due to inserting steel rifting beams to buttress the ferry drowned 44 meters underwater. As the stern was covered in lime soil, Chinese divers had to scrape off the foreign substance with special-purpose equipment such as plows.

With a yellow ribbon badge attached to his chest, Hong Chong, CEO of the Chinese rescue services, explained that the recovery was met with higher barriers than expected. "Though we wanted to quit several times, I could not just give up on the promise made to the bereaved who are still anxiously waiting for the bodies of their loved ones," said the CEO. What pressured him the most was some online users who denounced that the salvage services deliberately delayed the salvage in order to increase costs. While the contracted amount is fixed and their business is apt to record loss when the schedule is postponed, skeptics continued to sharpen their criticism.

Shanghai Salvage won the bid in August 2015 to recover Sewol Ferry, beating globally renowned European peers. In an aim to win global accolades for their technological competency, Shanghai Salvage also offered a generous tender price. Despite harsh conditions, the future of the Chinese rescue services lied on refloating the sunken ferry. As a matter of fact, the recent recovery was no less than a miracle. Still, the issue at hand is the deficits. "A total of 130 million dollars (or 149.2 billion won) was leveraged for the project," said the CEO. "I wish the Korean government could compensate the loss occurred (by the salvage)."

Nonetheless, it was a legally-binding contract between the two stakeholders. The prevailing thought is that compensation may set a bad precedent, as it is the fate of a business to take risks. There are even comments that the rescue services gained an intangible value with reputation high enough to cover the loss. However, some also argue that a minimum amount of conservation should be made to the salvage services, and insisted that Beijing's dirty measures on the deployment of THAAD should be set aside from respecting the fearless Chinese divers who risked their lives. It was known that the Ministry of Maritime Affairs and Fisheries were considering a partial conservation up to 50 billion won. Now that the ferry is recovered, the next step would be solving the financial issues.