Never Given: Egypt Asks $ 1 Billion To Free Ship That Blocked Suez Canal – 04/13/2021 – Market

It seemed like a happy ending.

The success of the maneuver that eventually unlocked the Ever Given freighter from the Suez Canal at the end of March was celebrated around the world. The story of the blockade of one of the most important routes of international trade was over.

But in reality, the problem is far from solved.

The reason? Egypt decided not to release the ship until a fine of $ 1 billion (5.7 billion reais) was paid in compensation for the damage generated during the blockade week. The nearly 400-meter freighter is currently anchored in the so-called Grande Lago Amargo, a salt lake located between the south and north of the Suez Canal.

“The ship will remain here until an investigation is completed and compensation is paid,” Osama Rabie, chairman of the Suez Canal Authority (ACS), told Egyptian public television.

“We expect an early agreement,” he added. “As soon as they accept the compensation, the ship will be able to move.”

Regarding the amount of compensation, Rabie said in early April that “the damage and losses will be calculated and how much the dredging gear will be consumed”.

“The estimate will reach $ 1 billion or maybe a little more. It is a right that Egypt has,” he said.

This value would be calculated on the basis of the loss of rights to use the lost channels after several other vessels diverted the route, circling South Africa. In addition, the waterway is damaged during drainage, efforts to remove cargo, and equipment and material costs. .

Shoei Kisen, a Japanese company that owns Ever Given, said it had yet to receive any official complaints or legal action over the blockade caused by the vessel, but admitted it was in “negotiations” with chain authority.

Why did the ship run aground?

Osama Rabie’s statements come amid an investigation that seeks more clues as to how Ever Given got stranded on the side of the chain.

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

“The canal has never been closed due to bad weather,” Rabie said. He also denied that the huge size of the ship was the cause, as “even larger freighters” pass through this stretch.

Because it is one of the world’s main economic arteries – where more than 12% of total trade passes, the stagnation of the Suez Canal has resulted in a series of economic consequences that have ended up touching the pockets of millions of people.

Nearly two million barrels of oil and around 8% of liquefied natural gas pass through the Suez Canal every day.

This had a strong impact on the price of these products.

In addition, it is estimated that more than 360 ships were paralyzed in the canal, among freighters with containers and tankers.

How much did the blockade of the Suez Canal cost?

According to Osama Rabie, the grounding of the freighter had a big impact on this trade route, costing between 14 and 15 million US dollars (about 80 million reais) each day of blockage.

The channel is an important source of income for Egypt. Even before the pandemic, the trade that crossed it represented 2% of the country’s GDP according to the rating agency Moody’s.

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