The owners of Ever Given super container ship have agreed to pay $540 million to Egypt's Suez Canal Authority in compensation for the vessel running aground and blocking the waterway in March, a source close to the negotiations said.
The authority announced an agreement had been reached on Sunday but did not reveal the settlement amount. The deal will be signed and the ship unmoored at a ceremony on Wednesday in the Suez Canal city of Ismailia.
The Ever Given, a 400-metre container ship, ran aground while traversing the canal on March 23, blocking maritime traffic through the vital waterway for six days before it was freed following a massive salvage operation with expert crews from around the world assisting. Canal authorities had detained the ship as they pursued compensation for the incident.
An admiral stationed at the Suez Canal, who attended many of the negotiations, told The National that the SCA would receive compensation of $540m, with an initial payment of $240m and the balance to be paid over the following year.
The authority will also receive a new tugboat to replace one lost during the six-day rescue effort that also caused the death of an Egyptian crew member.
The admiral described the settlement as a win for the country, saying that “Egypt’s rights were upheld” after the months-long dispute with the vessel owner, Japanese shipping company Shoei Kisen Kaisha.
The SCA initially sought $916m in compensation from the owners but lowered their demand to $550m.
SCA lawyer Khaled Abu Bakr said that despite the ship's owner also contesting the reduced sum, the SCA did not budge, feeling that it was a fair amount for the "serious" structural damages and revenue losses sustained during the blockage.
Nearly 10 per cent of global trade flows through the shipping route every year and navigation fees earn Egypt billions of dollars in revenue a year.
Mr Abu Bakr said that once the agreement is signed, the SCA will drop its lawsuit against the ship’s owner and allow the Ever Given to leave the Great Bitter Lake where it has been moored since it was refloated in late March.
The Ismailia court hearing the dispute repeatedly postponed its verdict to give the SCA and the ship's owner time to reach a settlement out of court.
According to the admiral, the compensation will go towards repairing structural damage to the canal, as well as fixing the pollution caused by the Ever Given emptying its ballast water in the waterway, a highly polluting act that killed much of the marine life in a portion of the canal.
The settlement also covers the loss of revenue the SCA sustained as hundreds of ships were either forced to wait in place for the canal to be cleared or take the longer and more expensive route around the Cape of Good Hope at Africa’s southern tip.
SCA Chairman Admiral Osama Rabie said the authority did not want to lose the ship’s owners as a client in addition to not wanting to affect bilateral relations between Egypt and Japan.
Former captain Sameh El Wakeel told The National that the negotiations were a very precarious endeavour for the SCA, which had to implement the utmost sensitivities to ensure that the dispute ended with no enmity.
“Millions are breathing a sigh of relief now that this debacle is over. But what’s even better for Egypt is that it ended so amicably. I think the SCA’s handling of the situation has restored many Egyptians’ faith in the nation and its ability to protect its interests in a civilised and diplomatic way,” he said.