Egypt demands US$ 1 bi reimbursement for Ever Given blockade

The successful maneuver that unlocked the Ever Given freighter from the Suez Canal in late March was celebrated worldwide. But the story is not over concerning the blockade of one of the most important trade routes in the world. That’s because Egypt has decided that it will not release the ship until a US$ 1 billion (R$ 5.7 billion) fine is paid as compensation for the damage generated during the week the ship was stuck.

The nearly 400-meter freighter is currently anchored in Grande Lago Amargo, a salty lake located between the southern and northern ends of the Suez Canal.

According to Osama Rabie, president of the Suez Canal Authority (ACS), the ship will remain there until an investigation is completed and compensation is paid. “We expect a quick deal,” he said. “As soon as they agree to the compensation, the ship will be able to move.”

Regarding the amount of compensation, Rabie said in early April that “we will calculate the damages and losses and how much the dredging machines cost. The estimate will reach US$ 1 billion or maybe a little more. It is Egypt’s right,” he said.

This value is calculated based on the loss of channel usage fees after several other vessels diverted the route, going around South Africa. There was also damage caused to the waterway during drainage and efforts to remove the freighter and equipment and materials costs.

Shoei Kisen, a Japanese company that owns the Ever Given, said he had not yet received any official complaints or legal action for the blockade caused by the vessel but acknowledged that he was in “negotiations” with the channel’s authority.

Osama Rabie’s statements come in the middle of an investigation that seeks more clues as to how the Ever Given ended up stranded on the channel’s bank.

The initial cause was attributed to strong winds, but now researchers must check for technical or human errors, a theory that the president of the ACS defends.

“The canal was never closed due to bad weather,” said Rabie. He also denied that the ship’s enormous size was the cause, as “even larger freighters” cross that stretch.

The closing of the Suez Canal caused a series of economic consequences that affected millions of people’s pockets. Almost two million barrels of oil and about 8% of liquefied natural gas pass through the Suez Canal every day. This had a strong impact on the price of these products. Also, it is estimated that more than 360 vessels were paralyzed in the canal, including container cargo vessels and oil tankers.

How much did the Suez Canal blockade cost?

According to Osama Rabie, the stranding of the freighter had a great impact on this commercial route, costing between US$ 14 and US$ 15 million (about R$ 80 million) each day it was blocked.

The channel is an important source of revenue for Egypt. According to the credit rating agency Moody’s, the channel contributed 2% to the country’s GDP before the pandemic. Since then, trade has only increased.

Source: BBC

Sharing is caring!