Exclusive-Baltic Sea shipping tax could pay for undersea cable protection, says Estonian minister

By John Geddie and Tim Kelly

TOKYO (Reuters) - Shipping firms may need to pay a fee to use the Baltic Sea, one of the world's busiest shipping routes, in order to cover the high costs of protecting undersea cables, Estonia's defence minister said on Wednesday following a spate of breaches.

NATO said last week it would deploy frigates, patrol aircraft and drones in the Baltic Sea after a series of incidents where ships have damaged power and communications cables with their anchors in acts of suspected sabotage.

In addition to the patrols, Defence Minister Hanno Pevkur said countries are weighing other measures to protect cables, including installing sensors to detect anchors dragged across the sea floor or constructing casings or walls around the cables.

But this will come at a cost, and whether countries or cable operators end up paying for it, consumers may be left ultimately footing the bill through higher taxes or utility costs.

Another option, Pevkur said, is levying a tax on vessels that sail through the Baltic Sea, that is bordered by eight NATO countries and Russia.

"Let's say that when you go to the airport you have the landing fee, you have the airport fee and this is paid in the ticket," he told Reuters in an interview in Tokyo.

"So in one moment maybe we will see that when you are passing through the Danish straits there will be a cost for the companies to pay this because this is basically an insurance fee to damaging the cables."

Pevkur added that there were different options on the table and that countries would have to find a common solution.

Globally, around 150 undersea cables are damaged each year, according to the UK-based International Cable Protection Committee. The telecoms cables, power lines and gas pipes in the shallow Baltic are seen as particularly vulnerable due to its very intense traffic, with as many as 4000 ships crossing its surface every day, according to some estimates.

Swedish authorities seized a Maltese-flagged ship on Monday in connection with damage caused to a cable running between Latvia and Sweden, one of four similar incidents in just over a year that have also affected power and telecoms lines running between Estonia and Finland.

Pevkur said while official investigations are ongoing, the series of incidents point to coordinated action by ships that are part of Russia's "shadow fleet".

"When we see that all those ships are part of the shadow fleet of Russia although having different flags on their tail...then of course you know we have to connect the dots," he said.

Moscow has accused Western countries of making "evidence-free" assertions about its involvement in the incidents.

(Reporting by John Geddie, Tim Kelly and Irene Wang in Tokyo; Editing by Raju Gopalakrishnan)