Egypt expects $1 billion in damages over stuck ship in Suez

Canal regulations stipulate “Masters are held solely responsible for all damage or accidents of whatever kind resulting from the navigation or handling of their vessels directly or indirectly by day or night ”.
Friday 02/04/2021
Ship Ever Given, one of the world’s largest container ships, is seen after it was fully floated in Suez Canal, Egypt March 29, 2021. REUTERS
Ship Ever Given, one of the world’s largest container ships, is seen after it was fully floated in Suez Canal, Egypt March 29, 2021. (REUTERS)

CAIRO--Egypt is expecting more than $1 billion in compensation after a cargo ship blocked the Suez Canal for nearly a week, according to the top canal official. He also warned the ship and its cargo will not be allowed leave Egypt if the issue of damages goes to court.

Lieutenant General 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.

“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.

Ship Ever Given, one of the world’s largest container ships, is seen after it was fully floated in Suez Canal, Egypt March 29, 2021. (Reuters)
The Ever Given was wedged across the canal for six days (AP)

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 the probe went smoothly and the amount of compensation was agreed, then the ship could sail on without problems.

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 compulsory to guide vessels through the narrow waterway, but the ship’s captain retains ultimate authority.

Canal regulations stipulate “Masters are held solely responsible for all damage or accidents of whatever kind resulting from the navigation or handling of their vessels directly or indirectly by day or night ”.

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, after days of unsuccessful attempts to dislodge the colossus,  that had captivated the world, drawing scrutiny and social media ridicule, then guided the Ever Given through the waterway.

The Ever Given had crashed into a bank of a single-lane stretch of the canal about 6 kilometres (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-kilometre (3,100-mile) detour that costs ships hundreds of thousands of dollars in fuel and other expenses. 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.