Egypt has plans to build a new Suez Canal alongside the existing 145-year-old historic waterway in a multi-billion dollar project to expand trade along the fastest shipping route between Europe and Asia.
The project, to be run by the army, is a major step by new President Abdel Fattah al-Sisi to stimulate Egypt’s struggling economy and recalled some of the grand national programs of one of Sisi’s predecessors, army strongman Gamal Abdel Nasser.
The Suez Canal earns Egypt about $5 billion a year, a vital source of hard currency for a country that has suffered a slump in tourism and foreign investment since the 2011 uprising that preceded Mursi’s presidency.
An official in the Suez Canal Authority told Reuters the new canal was set to boost annual revenues to $13.5 billion by 2023. The new channel, part of a larger project to expand port and shipping facilities around the canal, aims to raise Egypt’s international profile and establish it as a major trade hub.
“This giant project will be the creation of a new Suez Canal parallel to the current channel of a total length of 72 kilometers (44.74 miles),” Mohab Mamish, authority chairman, told a conference in Ismailia, a port city on the canal.
He said the total estimated cost of drilling the new channel would be about $4 billion and be completed in five years, though Sisi said he hoped it would be finished within a more ambitious one-year deadline.
The original canal, linking the Mediterranean and Red Seas, took 10 years of brutal, poorly paid work by Egyptians, drafted at the rate of 20,000 every 10 months from “the peasantry”.
It slashed weeks if not months off journeys between Europe and Asia that otherwise necessitated a trip round Africa. Up to 20 Egyptian firms could be involved but would work under military supervision, he said.
Egypt has planned for years to develop 76,000 sq km (29,000 sq miles) around the canal into an international industrial and logistics hub to attract more ships and generate income.
Neil Davidson, senior adviser for ports and terminals at London-based Drewry Maritime Research, said the new canal would not necessarily generate greater trade but the development of a hub around it could prove lucrative.
“The strategic location of Egypt and the canal is a key advantage… being a key point where cargo can be distributed or worked on. This hubbing concept is extremely valuable,” he said.
Mamish, the chairman, said the project would involve 35 kilometers (22 miles) of “dry digging” and 37 kilometers (23 miles) would be “expansion and deepening”, indicating the current Suez Canal, which is 163 km (101 miles) long, could be widened as part of the project.
The Panama Canal linking the Atlantic and Pacific Oceans in Central America, is also being expanded with a third set of locks being built to allow bigger ships to pass through the waterway. That project is due to open in 2016.Among the bidders for the Suez project, according to Egypt’s Al Mal newspaper, was a group including state-run Arab Contractors and consultancy firm James Cubitt and Partners. Another included McKinsey & Co management consulting firm. Source: Reuters