A flyer image published by the Suez Canal Authority on March 24, 2021 shows part of the Taiwanese MV Ever Given (Evergreen), a 400-meter-long and 59-meter-wide ship that is stationed to the side and obstructs all traffic on the waterway of the Egyptian Suez Canal.
Suez Canal Authority | AFP | Getty Images
CAIRO – Egyptian authorities may seek over $ 1 billion in damages to help clear the Ever Given from the Suez Canal as a dilemma looms over who could pay the bill.
“We will achieve compensation of over a billion dollars,” Osama Rabie, chairman and managing director of the Suez Canal Authority, told the Egyptian broadcaster Sada El Balad on Wednesday evening.
Rabie said the figure was based on lost revenue in the canal, the cost of equipment and machinery, and the hours worked for the 800 rescuers who freed the ship.
“We’re going to charge a reasonable amount,” Rabie said, without specifying who may be required to pay, according to a translation on NBC News.
“We saved them so much by saving the ship without major damage or loss,” he added.
“The whole ship could have been lost.”
The 200,000-ton mega-container carrier was successfully floated again on Monday, six days after it was stuck sideways in the Suez Canal. The incident sparked a crisis in international shipping, held $ 9 billion a day in world trade and left 422 ships transporting everything from crude oil to cattle waiting to pass by.
Authorities said the backlog will be cleared by Saturday, but the sea congestion could have long-term effects on ports and supply chains around the world.
Rabie said he hoped a compensation agreement could be reached “in two or three days” and, if not, Egypt could stop the ship in Great Bitter Lake north of the Suez Canal, where it is currently undergoing maintenance checks.
“We could agree on some kind of compensation or it could go to court,” he said. “If they decide to go to court, the ship should be detained,” he warned.
As the clue continues, frontline rescuers have reported firsthand what happened within the mission to free Ever Given this week.
“The hardest part was fear,” Aly Awamy, a mechanic for the mashhour excavator, told NBC News in Egypt on Thursday.
“We were working under a 10-story building that could have fallen on us.”
The crew of the Mashhour, a dredger capable of moving more than 70,000 cubic feet of sand per hour, were celebrated for their efforts to clear the gigantic ship from the walls of the canal.
“It was very dangerous,” said Mashhour’s head excavator Mohammed Sayed. “It was the first time in history that we used a dredger to float a ship and free a grounded ship.”
Sayed said he feared the Ever Given would list and their containers might fall from above as he pulled sand and mud from below.
“That was one of the most difficult and greatest challenges,” he said. “Thank God, everything went well.”
Fellow excavator Youssef Naghi said he was also concerned as he raced to clear the canal.
“Some of the difficulties we faced included time pressures, water currents, wind currents … the type of soil we were working on made it really difficult,” he said.
“The whole world was waiting for the ship to be released.”
Investigation is ongoing
Investigators are now looking for new clues about Ever Given’s plight, including an investigation into what happened on the ship’s bridge when it ran aground.
“There’s a black box like the one on the planes that records everything,” Rabie said.
“Every word that was said about the machinery, every word about the steering, every word the captain said, or anything else … everything is recorded.”
While high winds have been cited as a contributing factor to the collision, human and technical errors are also areas of investigation.
The Suez Canal Authority said it was not to blame, although two of their pilots were on board the ship when it ran aground.
The incident has put the opaque world of shipping into the spotlight. At the time of the incident, Ever Given was owned by a Japanese company chartered by a Taiwanese conglomerate, managed by German operators, sailed by a crew of Indian nationals, registered in Panama and sailing in Egypt.
The levels of responsibility add complexity, according to Brian Schneider, senior insurance director at Fitch Ratings.
“I’m assuming the $ 1 billion relates to the estimate of total losses from the event and not to any specific compensation from the Suez Canal Authority,” Schneider told CNBC on Thursday via email.
“I expect the loss in the insurance industry is more likely to be hundreds of millions of dollars since the ship was freed in six days,” added Schneider, saying the loss could have reached $ 1 billion if the ship was unloaded goods would have to be spoiled and insurers had to accept a loss of income.
“SCA’s claims should be limited to sewer damage and salvage operations,” he said.
A spokesman for the ship’s operator, Bernhard Schulte Shipmanagement, told CNBC: “Ongoing investigations will determine the numerous factors involved in this incident and all claims will be assessed on a case-by-case basis.”
Taiwan’s Evergreen Marine Corp has reportedly stated that it is not responsible for delays in the cargo being carried, while the owners, Shoei Kisen, told Bloomberg that they will be discussing the compensation with the canal authority but will not provide details at this time.