Who will pay for clearing Suez Canal blockage?

Investigations are underway on why 'Ever Given' ran aground, however various theories have been floated on the incident

The 400-metre-long Ever Given super-container ship might become the centre of a long-protracted battle on who is ultimately responsible to pay for its rescue. To determine this, it is key to investigate and figure out the reason for the ship to go aground.

The ship's operator Bernhard Schulte Shipmanagement has blamed strong winds as the reason for the crash and ruled out mechanical or engine failure as a cause. Observers blame the 'Sail Effect' for the grounding. The 'Sail Effect' happens when strong winds strike a ship with containers stacked high. The effect pushes the ship in the direction of the wind.

Another section of observers disagree and say that the ship lost power to steer in high winds and technical and human errors may be to blame.

Also Read | Explained: How a giant container ship blocked the Suez Canal

Experts boarded the Ever Given as it idled on Tuesday in Egypt's Great Bitter Lake, just north of the site where it previously blocked the canal. A senior canal pilot, speaking on condition of anonymity because he was not authorised to talk to journalists, told The Associated Press that experts were looking for signs of damage and trying to determine why the vessel ran aground.

Egypt lost between $12 and $15 million in revenues for each day the waterway was closed, according to slightly revised figures from Suez Canal Authority. The crash created a massive traffic jam that held up $9 billion a day in global trade and already strained supply chains.

The blocking of the Suez Canal by one of the world's largest container ships is likely to result in losses worth hundreds of millions of euros for the reinsurance industry, Fitch Ratings said, even as rescue teams were successful in refloating the vessel on Monday, March 29.

Also Read | Global reinsurers stare at massive losses from Suez Canal blockage: Fitch Ratings

Shoei Kisen Kaisha Ltd. is covered with some $3 billion in liability insurance through 13 Protection & Indemnity Clubs. Those clubs are not-for-profit mutual insurers used by the vast majority of global shipping firms.

Global legal firm Clyde and Co. said the Ever Given's owner would likely pay Egypt's canal authority for the assistance already rendered to the vessel. The authority also could fine the Ever Given. The firm estimated that the ship may be worth up to $110 million and the cargo was valued at up to an additional $500 million.

The company added, "In terms of causation, there were reports of a "power outage". Owners have pointed to "strong winds", which in our preliminary view seems improbable." The firm added that the SCA may levy a fine on the owners of the ship as a result of the casualty.

Also Read | Ever Given ship: Shipping Ministry says in touch with concerned authorities over crew safety

India's Union Ministry of Shipping on Tuesday said it is in touch with concerned authorities about the safety of the crew. “The Ministry is monitoring the situation. The Director-General of Shipping is in touch with concerned authorities regarding the well-being of the Indian crew. However there is nothing to comment on this issue as of now,” said an official in the Shipping Ministry.

National Union of Seafarers of India General Secretary Abdulgani Serang spoke to the Indian seafarers on board the ship and expressed solidarity with them.

(With inputs from agencies)