Egypt gets set to release megaship which blocked the Suez Canal

Egypt gets set to release megaship which blocked the Suez Canal

July 5, 2021

Egypt finally gets set to release megaship Ever Given which blocked the Suez Canal as it agrees compensation deal with vessel’s owners – after previously demanding $550million

  • The Ever Given will be freed from a holding lake in the Suez canal on Wednesday
  • The vessel was seized due to a failure to pay compensation and remained at the holding lake while the owners and Egyptian authorities negotiated settlement
  • The vessel became lodged in the crucial global trade artery for 6 days in March

Egypt will release the megaship which blocked the Suez Canal for nearly a week earlier this year after authorities reached a compensation agreement with the vessel’s owners.

Egypt’s Suez Canal Authority (SCA) said the Ever Given would be freed on Wednesday from a holding lake mid-canal, where the vessel and its crew were impounded while the two sides negotiated a settlement.   

The Taiwanese operated vessel got diagonally stuck in the narrow but crucial global trade artery in a sandstorm on March 23, setting in motion a mammoth six-day-long effort by Egyptian personnel and international salvage specialists to dislodge it.

The SCA did not reveal details of the settlement deal with the Shoei Kisen Kaisha Ltd., the Japanese owner of the Ever Given, but Egypt had previously demanded $550 million. 

The Taiwanese operated vessel got diagonally stuck in the narrow but crucial global trade artery in a sandstorm on March 23, setting in motion a mammoth six-day-long effort by Egyptian personnel and international salvage specialists to dislodge it

Egypt’s Suez Canal Authority (SCA) said the Ever Given would be freed on Wednesday from a holding lake mid-canal, where the vessel and its crew was impounded while the two sides negotiated a settlement

It said the deal will be signed in a ceremony in the Suez Canal city of Ismailia on Wednesday, and participants would be able to watch the ship leaving. 

‘Preparations for the release of the vessel will be made and an event marking the agreement will be held at the Authority’s headquarters in Ismailia in due course,’ Faz Peermohamed of Stann Marine, which represents owner Shoei Kisen and its insurers, said in a statement. 

Lt. Gen. Osama Rabie, the SCA chairman, said the canal will receive a tug boat with a pulling capacity of about 75 tonnes as part of a settlement, without mentioning any other details.

‘We preserved the rights of the authority in full, preserved our relationship with the company and also political relations with Japan,’ he told a private TV channel on Sunday evening.  

Rabie said last month the parties had agreed on a compensation amount. But he said it would not be made public as they had signed a non-disclosure agreement until the signing of the final contract. 

The Ever Given, which carries cargo between Asia and Europe, was seized on court orders until the vessel’s owners paid compensation.      

The Ever Given, which carries cargo between Asia and Europe, was seized on court orders until the vessel’s owners paid compensation

A financial dispute had developed and centred on the compensation amount the Suez Canal Authority is claiming for the salvage of the vessel.

The money would cover the salvage operation, costs of stalled canal traffic, and lost transit fees for the week the Ever Given blocked the canal. 

The SCA had demanded $916 million in compensation to cover salvage efforts, reputational damage and lost revenue before publicly lowering the request to $550 million.  

Owner Shoei Kisen and the ship’s insurers had disputed the claim and the ship’s detention under an Egyptian court order. 

The two sides have traded blame for the vessel’s grounding, with bad weather, poor decisions on the part of canal authorities, and human and technical error all being thrown out as possible factors.  

The six-day blockage disrupted global shipping. Hundreds of ships waited in place for the canal to be unblocked, while some ships were forced to take the much longer route around the Cape of Good Hope at Africa’s southern tip, requiring additional fuel and other costs.   

Maritime data company Lloyd’s List said the blockage had held up an estimated $9.6 billion worth of cargo each day between Asia and Europe.  

But the canal earned revenue of $3 billion in the first six months of 2021, up 8.8 per cent compared with the same period last year, despite the Ever Given accident, Rabie said.    

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