A handout picture released by the Suez Canal Authority on March 24, 2021 shows a part of the Taiwan-owned MV Ever Given (Evergreen), a 400-metre- (1,300-foot-) long and 59-metre wide vessel, lodged sideways and impeding all traffic across the waterway of Egypt’s Suez Canal.
Suez Canal Authority | AFP | Getty Images
CAIRO — Egyptian authorities may seek over $1 billion in damages for helping to clear the Ever Given from the Suez Canal, as a dilemma emerges over who might foot the bill.
“We will reach over a billion dollars in compensation,” Osama Rabie, the chairman and managing director of the state-owned Suez Canal Authority, told Egypt’s Sada El Balad channel on Wednesday evening.
Rabie said the figure is based on canal revenue losses, the cost of equipment and machinery, and the manpower hours for the 800 rescuers who freed the ship.
“We will ask for a fair amount,” Rabie said, according to a NBC News translation, without specifying who might be liable to pay.
“We saved them so much by rescuing the ship without any major damage or losses,” he added.
“The whole ship could’ve been lost.”
The 200,000 ton mega-container carrier was successfully refloated on Monday, six days after coming stuck sideways in the Suez Canal. The incident sparked a crisis in international shipping, held up $9 billion in global trade a day and left 422 vessels carrying everything from crude oil to cattle waiting to pass.
Authorities said the backlog would be cleared by Saturday, but the maritime traffic jam could have long lasting repercussions on ports and supply chains worldwide.
Rabie said he hoped a compensation agreement could be reached “in two or three days” and if not, Egypt might hold the ship in the Great Bitter Lake, north of the Suez Canal, where it is currently undergoing maintenance checks.
“We could agree on a certain compensation, or it goes to court,” he said. “If they decide to go to court, then the ship should be held,” he warned.
First-hand accounts
As the finger pointing continues, frontline rescue workers have offered first-hand accounts of what happened inside the mission to free the Ever Given this week.
“The most difficult thing was the fear,” Aly Awamy, a mechanic on the Mashhour dredger told NBC News in Egypt on Thursday.
“We were working under something the size of a 10-story building that could have fallen on us.”
The crew of the Mashhour, a dredging vessel that can shift more than 70,000 cubic feet of sand an hour, were hailed for their efforts to release the gigantic ship from the walls of the canal.
“It was very dangerous,” said Mashhour’s head dredger, Mohammed Sayed. “It was the first time in history that we used a dredger in floating a ship and freeing a grounded ship.”
Sayed said he feared the Ever Given would list and its containers could fall from above as he pulled sand and mud from underneath.
“That was one of the hardest and biggest challenges,” he said. “Thank God, everything went well.”
Fellow dredger Youssef Naghi said he also felt worried as he raced to help clear the canal.
“Among the difficulties we faced was the time pressure, water currents, wind currents … the type of soil we were working in that made it really hard,” he said.
“The whole world was awaiting the release of the ship.”
Investigation underway
Investigators are now looking for new clues about the plight of the Ever Given, including an examination into what happened on the bridge of the ship when it ran aground.
“There is a black box like the one in the planes that records everything,” Rabie said.
“Every word that was said about the machinery, every word about steering, every word the captain or any others … everything is recorded.”
While strong winds have been cited as a factor behind the collision, human and technical errors are also areas of inquiry.
The Suez Canal Authority said it’s not to blame, despite two of its pilots being on board the ship when it ran aground.
Insurance claims
The incident has put the opaque world of shipping in the spotlight. At the time of the incident, the 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 transiting in Egypt.
The layers of responsibility add to the complexity, according to Brian Schneider, a senior director at the Insurance division of Fitch Ratings.
“My assumption is the $1 billion refers to their estimate of total losses from the event and not any specific compensation to the Suez Canal Authority,” Schneider told CNBC via email on Thursday.
“I expect that the insurance industry loss will more likely be in the low hundreds of millions of dollars given that the vessel was freed in six days,” Schneider added, saying the loss could have reached $1 billion had the ship needed to be unloaded as goods spoiled and insurers faced loss of revenue claims.
“SCA’s claims should be more limited to the canal damage and salvage operation,” he said.
Meanwhile, a spokesperson 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 considered on a case by case basis.”
Taiwan’s Evergreen Marine Corp has reportedly said it is not responsible for any delays of the cargo it was transporting, while the owners, Shoei Kisen, told Bloomberg that it will discuss compensation with the Canal Authority, but will refrain from giving details at this moment in time.
