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The owner of the massive cargo vessel that blocked the Suez Canal – almost triggering a global economic meltdown – is now facing a devastating punishment.
The Japanese-owned, Taiwanese-operated and Panama-flagged Ever Given was moved in the canal’s Great Bitter Lake after it was freed on March 29, and tailbacks totalling 420 vessels were cleared in early April.
It has been seized by Egyptian authorities, and will not be allowed to leave the country until a compensation amount is settled on with the vessel’s owner, Shoei Kisen Kaisha Ltd.
Lieutenant General Osama Rabie – chairman of Suez Canal Authority – said the owners “do not want to pay anything” for the damage caused.
However, the government is understood to be asking for at least $US900 million ($1.17 billion) in compensation.
That figure takes into account the salvage operation, costs of stalled canal traffic and lost transit fees for the week the Ever Given blocked the canal.
Mr Rabie said Egypt had suffered “great moral damage” in addition to the financial costs of the debacle.
Maritime data company, Lloyd’s List, said the blockage by the vessel, longer than four football fields, held up an estimated $US9.6 billion worth of cargo between Asia and Europe each day it was stuck.
Egypt also lost between up to $US15 million in revenue for each day the waterway was closed, according to the canal authority.
Shoei Kisen told news outlets the Ever Given had been seized and the canal had made a claim for compensation, but said negotiations were ongoing.
“They are still talking to us. So we will continue negotiations on compensation,” company spokesperson Ryu Murakoshi told The Wall Street Journal.
Analysts have warned apportioning legal responsibility for losses incurred by the numerous parties is likely to play out in protracted and complex international litigation.
Egypt’s President Abdel Fattah al-Sisi has ruled out any widening of the southern stretch of the canal where the boat became diagonally stuck.
Sisi oversaw an expansion of a northern section, which included widening an existing stretch and introducing a 35-km parallel waterway, to much fanfare in 2014-15.
But it was achieved at a cost of over $US8 billion, without significantly increasing revenues from the canal.
The Suez Canal earned Egypt just over $US5.7 billion in the 2019/20 fiscal year, according to official figures — little changed from the $US5.3 billion earned back in 2014.
Egyptian authorities have presented the dislodging of the ship as a vindication of the country’s engineering and salvage capabilities, but observers point also to the crucial role played by international salvage experts.
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