Egypt Seeks Whopping $1 Billion Compensation After Vessel Blocks Suez Canal

Egypt said it is looking for a massive $1 billion compensation for the damage and losses suffered when giant container vessel Ever Given got stuck in the Suez Canal days, blocking international traffic.

The 400-meter vessel chartered by Taiwan's Evergreen Marine Corp, which got stuck in the narrow waterway on March 23, was freed and refloated nearly a week later.

Authorities at the Suez Canal Authority (SCA) said the compensation figure roughly equals losses linked to transit fees as well as damages suffered during the efforts to refloat the vessel. The amount also included expenses like the cost of equipment and labor, SCA chief executive Osama Rabie told television channel Sada Elbalad, according to Bloomberg.

"This is the right of the country ... This country should get its due," he said. He also averred that the incident damaged the reputation of Egypt.

Evergreen container ship
The Ever Given container ship, owned by Evergreen Marine Corp, became stuck in the Suez Canal on Tuesday, causing a massive traffic jam at either end of the waterway. Twitter

The Panama-flagged ship had veered off its course in a single-lane stretch of the canal during a sandstorm. The Japanese owner of the ship, Shoei Kisen, undertook the task of refloating the vessel, while the process was closely overseen by the office of the Egyptian president.

The Suez Canal provides one of Egypt's main sources of income, alongside tourism and remittances from expatriates.

Shipping Rates Double

Shipping rates for oil tankers nearly doubled last week after the vital waterway was blocked, preventing crude traffic. "Around 20% of Asia's naphtha is supplied by the Mediterranean and Black Sea via the Suez Canal," said Sri Paravaikkarasu, director for Asia oil at FGE.

A great number of oil tankers had diverted away from the canal. However, the re-routing ships around the Cape of Good Hope added at least two more weeks to the voyage and more than 800 tonnes of fuel consumption for Suezmax tankers.


Will There be Dispute?

Interestingly, the Canal authorities did not specify who they will seek the compensation from. Rabie, meanwhile, added that he doubted if there will be a need for legal proceedings as Egypt has a 'long relationship' with the ship owner.

The Evergreen management also exuded confidence that there will not be a dispute. "In 40 years now, not a single case of dispute has happened between SCA and Evergreen ... We all respect all the rules of the SCA," he said.