Egypt’s Second Suez Canal ‘Will Boost Trade’

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Egypt plans to build a new Suez Canal alongside the existing 145-year-old historic waterway in a multibillion dollar project aimed at expanding trade along the fastest shipping route between Europe and Asia.

The Suez Canal earns Egypt about $5bn a year in revenues, a vital source of hard currency for a country that has suffered a slump in tourism and foreign investment since its 2011 uprising.

The new channel, which is part of a larger project to expand Suez port and shipping facilities, 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 72km,” said the chairman of the Suez Canal Authority, Mohab Mamish, at a conference in Ismailia, a port town on the Canal.

He said the total estimated cost of drilling the new channel would be about $4bn, and would be completed in five years, though Egypt will strive to finish it within a more ambitious three-year deadline.

The original canal, which links the Mediterranean and Red Seas, took 10 years of intense and generally poorly paid work by Egyptians who, according to the Canal Authority, were drafted at the rate of 20,000 every 10 months from “the peasantry”.

It took weeks, if not months, of journeys between Europe and Asia, otherwise necessitating a trip round the tip of Africa.

Egyptian President Abdel Fattah al-Sisi, a former army chief, said the armed forces would be in charge of the new project for security reasons.

Up to 20 Egyptian firms could be involved in the project but would work under military supervision, he said.

Last year, Mr Sisi orchestrated the ousting of elected Islamist President Mohamed Morsi, and oversaw a massive crackdown on Mr Morsi’s Muslim Brotherhood.

This was followed by a rise in violence from Islamist militants based in the Sinai peninsula, which has stoked concern about the security of the nearby Suez Canal. The government has since been fighting militants in an ongoing military campaign in which hundreds have died on both sides. Any disruption to shipping along the canal tends to have a serious effect on trade and oil prices.

“Sinai, to a large degree, has a sensitive status. The army is responsible to Egypt for this,” said Mr Sisi, who has previously said he would not hesitate to award major projects to help revive Egypt’s battered economy to the army.

Mr Sisi’s allies and supporters have likened him to Gamal Abdel Nasser, the charismatic colonel who led a coup against the monarchy in 1952, set up an army-led autocracy and rounded up thousands of Muslim Brothers.

In 1956, Nasser nationalised the Suez Canal, leading to a failed invasion by Britain, which controlled the channel, as well as France and Israel.

Nasser was praised by Egyptians for pursuing several big projects during his 14 years as president of the country.

Pro-government Egyptian media did not hesitate to compare the Suez expansion plans to Nasser’s own state-led infrastructure projects that were a source of national pride.

Egypt has planned for years to develop 76,000km² around the canal to attract more ships and generate more income.

Mr Sisi said the new canal was an unannounced part of that project, which Egypt invited 14 consortia to bid for in January.

Reuters reported on Sunday that Egypt had chosen a consortium including global engineering firm Dar al-Handasah, as well as the Egyptian army, to develop the area. A promotional video played at the launch event suggested the project would cut waiting times for vessels and allow ships to pass each other on the canal.

Mr Mamish, the chairman, said the project would involve 35km of “dry digging” while 37km would be “expansion and deepening”, indicating that the current Suez Canal, which is 163km long, could be widened as part of the project.

Among the bidders, according to Egypt’s Al Mal newspaper, were a group including state-run Arab Contractors and James Cubitt and Partners, an international consultancy firm. Another included the McKinsey global management consulting firm

Gulf allies Saudi Arabia, the United Arab Emirates and Kuwait donated more than $12bn in cash and petroleum products to Egypt after the army overthrew Mr Morsi. However, Egypt remains in dire need of longer-term investments.

Source:BDLive

 

 

 

 

 

 

 

 

 

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