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'Country's Right': Egypt Expects Over $1 Billion in Damages as Suez Canal Blockade Eases

A container ship sails at the Suez Canal, in Ismailia, Egypt March 31, 2021. Suez Canal Authority/Handout via REUTERS

A container ship sails at the Suez Canal, in Ismailia, Egypt March 31, 2021. Suez Canal Authority/Handout via REUTERS

Officials said 85 ships were expected to pass the canal from both sides on Saturday. They will include the last 61 ships out of the 422 that were queuing when the Ever Given container vessel was dislodged on Monday

Egypt is expecting more than $1 billion in compensation after a cargo ship blocked the Suez Canal for nearly a week, a top canal official has said, warning that the ship and its cargo will not be allowed leave Egypt if the issue of damages goes to court. Lt. Gen. Ossama Rabei, head of the canal authority, said in a phone interview with a pro-government TV talk show on Wednesday that the amount takes into account the salvage operation, costs of stalled traffic, and lost transit fees for the week that the Ever Given had blocked the Suez Canal. Meanwhile, the canal authorities are expecting the backlog of stranded ship to be cleared by Saturday.

“It’s the country’s right,” Rabei said, without specifying who would be responsible for paying the compensation. He added that in the past, canal authorities and the ship’s owners have had a good relationship. The massive cargo ship is currently in one of the canal’s holding lakes, where authorities and the ship’s managers say an investigation is ongoing.

On Thursday, the ship’s technical managers, Bernard Schulte Shipmanagement, said in an email to The Associated Press that the ship’s crew was cooperating with authorities in their investigation into what led to the vessel running aground. They said that Suez Canal Authority investigators have been given access to the Voyage Data Recorder, also known as a vessel’s black box.

Rabie also said that if an investigation went smoothly and the compensation amount was agreed on, then the ship could travel on without problems.

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However, if the issue of compensation involved litigation, then the Ever Given and its some $3.5 billion worth of cargo would not be allowed to leave Egypt, he told the show’s host.

Litigation could be complex, since the vessel is owned by a Japanese firm, operated by a Taiwanese shipper, and flagged in Panama. Bernhard Schulte has said previously that two Egyptian canal pilots were aboard when the ship got stuck. Such an arrangement is customary to guide vessels through the narrow waterway, but the ship’s captain retains ultimate authority, according to experts.

On Monday, a flotilla of tugboats helped by the tides, wrenched the Ever Given’s bulbous bow from the canal’s sandy bank, where it had been firmly lodged. The tugs then guided the Ever Given through the water after days of unsuccessful attempts to dislodge the colossus that had captivated the world, drawing scrutiny and social media ridicule.

The Ever Given had crashed into a bank of a single-lane stretch of the canal about 6 kilometers (3.7 miles) north of the southern entrance, near the city of Suez. That forced some ships to take the long, alternate route around the Cape of Good Hope at Africa’s southern tip — a 5,000-kilometer (3,100-mile) detour that costs ships hundreds of thousands of dollars in fuel and other costs. Others waited in place for the blockage to be over.

The unprecedented shutdown, which raised fears of extended delays, goods shortages and rising costs for consumers, added to strain on the shipping industry, already under pressure from the coronavirus pandemic.

The last ships stranded by the grounding of a giant container vessel in the Suez Canal should pass through the waterway on Saturday, according to the canal authority, which said an investigation into the incident would report its findings soon.

Osama Rabie, chairman of the Suez Canal Authority (SCA), said 85 ships were expected to pass the canal from both sides on Saturday. They will include the last 61 ships out of the 422 that were queuing when the Ever Given container vessel was dislodged on Monday, thus ending the backlog of shipping that built up during the crisis, he added.

International supply chains were thrown into disarray when the 400-metre-long (430-yard) Ever Given ran aground in the vital trade artery on March 23, with specialist rescue teams taking almost a week to free her after extensive dredging and repeated tugging operations.

first published:April 03, 2021, 16:55 IST