Egypt bids adieu to Suez Canal saga with payoff and a party


This picture taken on March 29, 2021 from a nearby tugboat in the Suez Canal shows a view of the Panama-flagged MV ‘Ever Given’ (operated by Taiwan-based Evergreen Marine) container ship as it begins to move.

  • The Ever Given will be seen off on Wednesday in a large ceremony. 
  • The vessel crashed into the banks of the Suez Canal and blocked the waterway for nearly a week. 
  • It was carrying some $1 billion in cargo. 

The 400-metre-long container ship will be seen off on Wednesday in
a ceremony attended by dignitaries, diplomats and company officials from around
the world. In fact, the last time the Suez Canal Authority, which is hosting
the event, promised this much fanfare was in 2015, when an $8 billion expansion
project was completed within a year. The ship is slated to sail into the
Mediterranean and then to Rotterdam.

This time though, the event will be as much
about closure as celebration. Because it was the Ever Given, the
giant Japanese-owned vessel carrying some $1 billion worth of cargo, that last
March lost control as it traveled north through the canal, crashing into the
banks and blocking the waterway like a giant cork for nearly a week. It was an
incident that roiled global markets and transfixed the world.

The ceremony will be marked by the signing of a settlement deal
between the canal authority and vessel owners Shoei Kisen Kaisha, capping
what turned into a public relations crisis for the overseers of the waterway
and, by extension, Egypt itself.

Freeing the ship just six days after the incident last March may
have won the authority some kudos, as well as providing relief for the
estimated $10 billion worth of marine traffic that built up each day as a
result. What happened next, in terms of determining blame and compensation,
carried an equally high premium for Egypt, both domestically and abroad.

“We have preserved our full rights regarding the costs of the
rescue operation and the damages caused to the navigation course,” Osama
Rabie, the authority chief, said on Egyptian TV on June 23. “We
also preserved the close relationship with the largest clients of the authority
and the economic and political relations with Japan.”

With the eyes of the world upon them, canal employees, along with
outside help, worked around the clock to free the Ever Given. Often risking
their lives, workers ensured that there was minimal damage to the ship, its
17,600 containers and the canal itself. In the end, the heavens offered a
helping hand when unusually high tides allowed teams to refloat the vessel.

Just as tricky as freeing the ship, though, was the process of
disentangling the arguments about blame and compensation.

Egypt had dodged a bullet by freeing the Ever Given so quickly and
clearing the backlog of over 400 ships delayed by the incident. It now had to
walk the line between recouping losses, both physical and perceived, and
ensuring that it didn’t appear to give up its rights before a global audience
or, at the same time, alienate its clients.

For the ship’s owners and insurers, it boiled down to a more basic
calculus: What could or should they pay?

As the issue moved to the Egyptian courts, which ordered the Ever
Given seized pending a resolution, the stakes grew on both sides. Egypt wanted
more than $900 million. The counteroffer was around $150 million.

Neither side has commented on the size of the settlement or
provided other details. Rabie, in another television interview, said it was
near the $550 million mark — the new figure that had been presented in revised
court documents. He declined to be more specific, however, citing
confidentiality agreements relating to the money issue.

But there’s more to the issue than money for Egypt.

While earnings from the Suez Canal are a key source of foreign
revenue for the country, credibility is priceless. It’s something President
Abdel-Fattah El-Sisi has been working to shore up.

Under his leadership, the canal-expansion project has been one of
several major infrastructure efforts launched to the tune of hundreds of
billions of Egyptian pounds. After the Ever Given incident, plans for another
expansion were proposed.

The desire to project a new, modern Egypt, required the same of
its officials and their ability to handle crisis. That was made clear by
El-Sisi in one his conversations with Rabie during the effort to free the Ever
Given.

The president says he asked the canal chief what the most
challenging aspect of refloating the vessel might be. Rabie said it would be
the offloading of the containers, a process some said may take up
to three months.

“Let’s be ready,” the president says he told Rabie. “Whatever
it costs we have to be ready in a crisis like this.”

ADVERTISEMENT



Source link : https://www.news24.com/fin24/Economy/Africa/egypt-bids-adieu-to-suez-canal-saga-with-payoff-and-a-party-20210707

Author :

Publish date : 2021-07-07 19:00:19

Tags:
share on: