Egypt seeks $1bn compensation for Ever Given crisis which blocked the Suez Canal for nearly a week

Egypt is expecting more than $1 billion (£722 million) in compensation after a cargo ship blocked the Suez Canal for nearly a week, according to the top canal official.

Suez Canal Authority (SCA) CEO Ossama Rabei also warned the ship and its some $3.5 billion (£2.5 billion) worth of cargo will not be allowed leave Egypt if the issue of damages goes to court.   

But he explained that if an investigation went smoothly and the compensation amount was agreed on, then the ship could travel on without problems.   

On Thursday, the ship’s technical managers, Bernhard 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. 

The news was announced by Rabei in a phone interview with government-run broadcaster Sada Elbalad on March 31.

He said the Canal Authority would demand the $1 billion (£722 million) sum in compensation for the six-day delay.

‘It’s the country’s right,’ Rabei said, without specifying who would be responsible for paying the compensation. 

It is expected either Japanese company Shoei Kisen Kaisha, who own the Panama-flagged Ever Given, or the Taiwanese firm Evergreen Marine Corp, who had charted the ship, will be liable for the compensation.    

But Evergreen Marine Corp have said the accident was not their responsibility and doubt they will be sought for compensation.  

Rabei said that in the past, canal authorities and the ship’s owners have had a good relationship. 

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.  

The ship was trapped for six days before authorities finally managed to set it free on Monday.

The Ever Given is now about halfway through the canal in a holding lake called Bitter Lake as the SCA investigates.

All of the ship’s crew are reportedly cooperating and have offered all of the logs or information that has been asked of them.

The compensation sum includes the costs of the salvage operation, transit fees that were lost and the costs associated with stopping all traffic in the canal.

The Suez Canal is one of the busiest shipping lanes in the world as it creates the shortest distance for vessels to cross from the Indian Oceans into the Atlantic taking roughly 16 hours.

The other options would be to sail around South Africa’s Cape of Good Hope, a voyage that could take around 24 days to complete, or to use the Arctic shipping root, which would add 35 days to the trip.   

The Ever Given had become jammed diagonally across a southern section of the canal in high winds early last Tuesday, halting traffic on the shortest shipping route between Europe and Asia. 

The bow of the Ever Given was finally dislodged from the channel’s bank on Monday and towed up the waterway after tugboats had straightened the vessel in an early-morning operation and dredgers had vacuumed away large chunks of sand.   

At least 400 vessels are waiting to transit the canal, including dozens of container ships, bulk carriers, oil tankers and liquefied natural gas (LNG) or liquefied petroleum gas (LPG) vessels by the time the Ever Given was freed on Monday.

The Canal reopened for shipping traffic in both directions of Monday evening after the waterway was checked for damage caused by the Ever Given. 

But 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.