20210329 ever given as it moves
Egypt is set to release the MV Ever Given on Wednesday, over 100 days since the megaship was refloated after blocking the Suez Canal for six days. Image Credit: AFP

Cairo: Egypt is set to release the MV Ever Given on Wednesday, over 100 days since the megaship was refloated after blocking the Suez Canal for six days, crippling global supply lines and costing billions.

The nearly 200,000-tonne container vessel became wedged across the canal during a sandstorm on March 23, blocking a vital artery from Asia to Europe that carries 10 percent of global maritime trade and pumps vital revenues into Egyptian state coffers.

After a round-the-clock salvage operation to dislodge it, Egypt seized the ship and demanded compensation from Japanese owners Shoei Kisen Kaisha for lost canal revenues, salvage costs and damage to the canal.

The Suez Canal Authority (SCA) announced Sunday that a final deal had been reached, without disclosing the amount of compensation to be paid.

In a statement, it said a ceremony would be held on Wednesday to mark the deal, after which the ship would leave.

Cairo had initially demanded $916 million in compensation before slashing that to around $550 million, but the final amount has been the subject of tough negotiations.

The SCA announced last month that it had signed a non-disclosure agreement with the Japanese firm ahead of reaching a final deal.

SCA chairman Osama Rabie, in a televised interview on Sunday, hailed the deal.

"We maintained our rights and we kept good relations with our clients," he said.

Millions in revenues

Cairo, which earns over $5 billion a year from the Suez, lost between $12 million and $15 million in revenues for each day the waterway was closed, according to the SCA.

The MV Ever Given's grounding and the intensive salvage efforts needed to refloat it also resulted in significant damage to the canal.

In April, maritime data company Lloyd's List said the blockage by the vessel, longer than four football fields, held up some $9.6 billion-worth of cargo each day it was stuck.

The Taiwanese-operated and Panama-flagged vessel was refloated on March 29, and tailbacks totalling 420 vessels at the northern and southern entrances to the canal were cleared in early April.

On Tuesday, the Ismailia Economic Court ruled the seized ship with its crew on board could be released, following a request from the SCA.

According to tracking service MarineTraffic, the ship has been moored in the northern part of Great Bitter Lake.

Rabie said the MV Ever Given had suffered "no leakage" and that it would leave Wednesday after the signing ceremony.

He said Egypt would also receive a 75-tonne tugboat from Shoei Kisen Kaisha as part of the compensation package, and noted that the family of one rescue worker who died during the salvage operation would also be compensated.

"The Suez canal has always been a site of sacrifices since it was built," he said.

Canal expansion

The Suez Canal earned Egypt just over $5.7 billion in the 2019/20 fiscal year, according to official figures - little changed from the $5.3 billion earned back in 2014.

Even with the grounding of the ship, Rabie said Sunday that canal revenues in the first half of the year had topped $3 billion.

But officials have been keen to avoid reputational damage from the incident, trumpeting Egyptian efforts in the salvage operation.

President Abdel Fattah al-Sisi swiftly pledged investment to avoid any repetition of the crisis, and in May approved a two-year project to widen and deepen the southern part of the waterway where the ship ran aground.

Sisi had overseen the $8 billion expansion of a northern section of the canal to much fanfare in 2014-15