Egypt’s Suez Canal Authority demands compensation for more than $1 Bln of losses and refloating costs

CAIRO – 1 April 2021: Suez Canal Authority will demand compensation for losses and costs it bore for refloating the Panama-flagged Ever Given ship as such losses and costs are initially estimated at more than $ 1 billion, stated Suez Canal Authority Chairperson Admiral Osama Rabie on Wednesday evening.

In media remarks to “On My Responsibility” talk show on Sada El-Balad T.V., he added that the authority’s staff members are working around the clock to end the traffic jam that was caused by the ship after it went aground at 151 km of the Suez Canal, where vessels pass in both directions, on March 23, 2021, and suspended the maritime navigation through it for six days.

Daily losses of the canal due to the six-day blockage caused are estimated at $12 to $15 million, as Admiral Rabie said on Monday in a press conference in Ismailia.

Freed at 3:00 pm (Cairo time) on Monday by 800 personnel and 15 giant tugboats, Ever Given was pulled by two gigantic tugboats from its bow and entered the Great Bitte Lakes in Ismailia at 5:45 pm and the navigation resumed at 6:00 pm on Monday evening. Anonymous sources told Egypt Today four days ago that the ship has suffered damages at its bow and water entered in the bow’s holds due to its accident in rocky soil, but such damages did not affect its sailing when it has been pulled to the Lakes.

 

Since then, the Suez Canal has operated around the clock to end the traffic jam of 422 vessels that were stranded for six days. Rabie clarified that a total of 113 vessels passed through the canal on the first day, while the number of the crossed ships on Wednesday reached 81, noting that the number of the remaining ships is 179 ships as of Wednesday evening.

“The Suez Canal is receiving new ships, we are working around the clock to end the jam … the crisis will end on Friday,” he added.

Suez Canal Incentives

President Abdel Fattah El Sisi has directed Admiral Rabie to provide incentives for the stranded vessels by making from 5 to 15 percent on entry fees, the admiral told the talk show, noting that the percentage of the discount will depend on how long did the ship stay in the canal.

 

He added that President Sisi directed to get all equipment required for developing the Suez Canal’s capabilities. “President directed to buy giant tugboats with the maximum tugging power capacity. The price of a gigantic tugboat is estimated at more than $ 0.5 billion,” he said, noting that tugging boats are mainly manufactured in China and South Korea.

During the operation of the refloating, two non-Egyptian giant tugboats arrived at the canal, one from the Netherlands and the second from Italy, to join the canal’s fleet of the tugboats, but the authority did not use the Italian one. In addition to this, several countries have offered their help in the refloating operation.

He also revealed that Egypt is studying to buy huge cranes that would be used in offloading the containers.

“Our employees are skillful and they managed to refloat the ship after only six days without losses in the containers or in the ship itself,” he said. “The ship will leave the canal after the end of the investigations and reaching an agreement regarding paying the compensation,” he continued.

“The Japanese company [ Shoei Kisen, the owner of the ship,] has been coordinating and helping since the occurrence of the accident. They sent a team of the Dutch company SMIT and a Dutch tugboat,” Rabie said, saying “The company is a good agent and we have dealt with them several times.” He speculated that the problem could end in only 2 to 3 days.

Launching Investigation

Rabie stated that the Suez Canal Authority launched on Wednesday its marine investigations into the accident, adding that the authority asked for handing all records and documents on the board of the ship.

“All things took place on board of the ship are recorded in the black box of the ship,” he said, noting that a five-member investigative committee has been assigned by the canal authority and will include a marine expert, judicial one, and expert in compensation matters, besides an engineer.

The committee will do its report, while the authority will calculate all the costs of the operation of refloating the ship over the six days, he said, estimating the costs at more than $1 billion.

The ship has cargos estimated at $3.5 billion “We already saved a lot of money for them [the Insurance companies and the owner] by ending the problem without losses in the cargos or in the ship.”

Consultant to the Suez Canal Authority Captain Sayed Sheisha declared in a phone-in that he presides over the committee that is carrying out investigations on the MV EVER GIVEN crisis.

The captain explained that investigations shall answer the question of whether the ship's captain followed the instructions of the Suez Canal guide or not before its grounding pointing out that the process will be carried out in public for it is an issue of global interest.

The official noted that if the ship rejects the investigation and refrains from providing the necessary information, it - along with its load - will be temporarily confiscated and a civil lawsuit will be filed. That would take two years. However, Sheisha speculates a solution – like agreeing on compensations - will be reached in 3-4 days.

The investigation includes examining the equipment of the ship, determining whether they had been used before it got stuck, and if they gave warning before the stranding or not.

The Suez Canal consultant underscored that the ship's captain is the one who has the final decision on the navigation of the ship. He also noted that the company operating the ship is the one that is held accountable, not the owner.