Naguib Sawiris: Suez Canal Authority’s demands are unrealistic

Egyptian billionaire businessman Naguib Sawiris said the compensation demanded by Egypt’s Suez Canal Authority (SCA) is exaggerated and unrealistic.

He made his sentiments known on Twitter, adding that the requested compensation is not in line with the country’s national interests.

Naguib’s reaction follows earlier reports that Ever Given, a 200,000-tonne giant vessel that ran aground months ago, was “seized” by the canal authorities on court order until its owners paid $916 million.

The court order was backed by Article 59 and 60 of Egypt’s Maritime Trade Law, which stipulates that the ship must remain seized until compensation is paid in full to the SCA.

Global analysts and trade strategists believe the parties related to the conflict might seek retribution in international court in what will likely be complex and protracted cases.

Possibly in reaction to these opinions, the SCA reduced the compensation claims last Friday from $916 million to $600 million, Egypt Today reported.

It is worth noting that in addition to the compensation sought as damages by the SCA due to the ship’s grounding, the vessel created a blockage disrupting already strained global trade. A total of $9.6 billion in cargo was held up each day it remained stuck.

Suez Canal accounts for about 12 percent of international trade and 30 percent of global container ship traffic daily. The Ever Given’s grounding led to a logjam*, with about 450 ships unable to access the canal.

The blockage made other ships opt for a long and more expensive trip around the southern tip of Africa instead of through the canal, thus leading to increased costs.

In addition to the economic losses resulting from the logjam, the SCA revealed that the authority lost about $15 million in revenue each day that the waterway was closed.

*Logjam: A blockage that denies ships access to a particular route.