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New Suez Canal

Egypt opened a major expansion of the Suez Canal on August 06, 2015 that President Abdel-Fattah el-Sissi billed as an historic achievement needed to boost the country's ailing economy after years of unrest. The $8.5 billion extension involved digging and dredging 72 kilometers of the 193-kilometer canal and making a parallel waterway to facilitate two-way traffic. The government said it will more than double the canal's annual revenue to $13.2 billion by 2023. But some economists and shipping analysts question whether there is sufficient traffic and east-west trade to meet the ambitious revenue targets.

The canal expansion is the centerpiece of a grand agenda to lift the most populous Arab nation out of poverty and secure Sissi's grip on power after he ousted Egypt's first freely elected civilian President Mohamed Morsi of the Muslim Brotherhood in 2013 following mass protests.

Egyptian president Abdel-Fattah El-Sisi attended on 05 August 2014 the inauguration of a 72 kilometer-long waterway to be dug alongside the Suez Canal. El-Sisi ambitiously announced that digging for the 35 km parallel canal will be finished by mid-2015 – far sooner than the three years previously announced for the project. A 35-km stretch out of the total 72 km long project will be completed by the military through "dry digging".

In 2014, Egyptian President Abdel Fattah El Sisi, addressed the UN General Assembly in New York. During his speech, he announced a project with the potential to become one of the most significant in the history of Egypt and the Middle East, and one that would have an impact on the entire world.

“It is the Egyptian people’s gift to the world,” he said during the assembly. He was referring to the construction of a second waterway at the Suez Canal; the doubling of one of the world’s most important trade passages. The link between the Red Sea and the Mediterranean Sea. And more importantly, just one pillar of a development project poised to dramatically change the face of Egypt socially, politically, and economically: the Suez Canal Zone.

The new waterway was planned to be 72 km in length at a cost of $4 billion, Mohab Memish, the head of the Suez Canal, announced. Mamish, chairman of the Suez Canal Authority, told a conference in Ismailia, a port town on the Canal, the new channel would be completed in five years, though Egypt will strive to finish it within a more ambitious three-year deadline. However, President Sisi wanted to demonstrate the strength and determination of the Egyptian people, and rallied them to complete the project in one year. It opened ahead of schedule.

Seventeen civilian companies had been chosen to finalise the project in cooperation with military companies under the supervision of the armed forces. El-Sisi called on Egyptians to participate in financing the project through buying shares, priced at $100 per share for Egyptians abroad, LE100 for locals and LE10 for students. He denied that any reservations the army might have had on the project were for political reasons, instead insisting that more studies were needed to assure that the project does not threaten Egypt's national security.

The new canal is part of the Suez Canal Development mega project, which includes the development of several seaports in the three governorates bordering the canal – Suez, Ismailia and Port Said – in addition to a seaport in the South Sinai city of Nuweiba and the development of Sharm Al-Sheikh airport. A number of large-scale projects are also in the works, including a "Technology Valley" in Ismailia which will host several technology projects along with a new industrial zone west of the Gulf of Suez.

A total of 80 contractors plus six dredging companies were deployed. The volume of dry excavation works amounted to 250 million cubic meters, at an estimated cost of $550 million.

Dredging works totaled 242 million cubic meters of soil, at an estimated cost of $2.1 billion. The first phase was to deepen and widen 37km of the western bypasses at a depth of 24 meters. Secondly, the digging of the new parallel waterway commenced, at a length of 35km and to a depth of 24 meters, at a water level width of 320 meters at its widest point.

It would increase the daily average of transiting vessels to 97 ships by the year 2023, up from 49 ships at present, and achieve direct unstopped transit for 45 ships in the two directions, and stepping up the permissible draft to 66ft all through the Suez Canal.

Revetment works extend along the Canal with a length of 100km; at an estimate cost of EGP 500 million. Dredging works amount to about 250 million cubic meters of soil, at an estimate cost of EGP billion 15. Other related works include deepening the existing western by-passes of 37 km total length to a depth of 24m (66ft draft). The western by-passes comprise those by-passes at the Great Bitter Lakes of 27km long, and those at Ballah of 10km long. Digging of 35km of a new parallel waterway, to a depth of 24m, and a width of 317m at water level, so that the new channel can accommodate vessels with up to 66 ft. draft.

Funding for the project was also a combinative effort. President Sisi announced the Suez Canal Authority would be the owner and operator of the project and was able to receive funding from Egyptian nationals through local banks. The authority received a staggering $8.5 billion in just six days. Investors were given the opportunity to put forward set amounts, ranging from 10 EGP onwards. Quarterly dividends of 12 percent will be paid back to all investors.

The Suez Canal Authority (SCA) started dredging work to extend a second lane that allows for two-way traffic in a southern section of the canal near to where a giant container ship got stuck for six days in March 2021, it said 15 May 2021. The SCA has said previously that it planned to extend a second canal lane that opened in 2015 by 10 km to make it 82 km long, and that it would widen and deepen a single lane stretch at the southern end of the canal. The work began following directives from Egyptian President Abdel Fattah al-Sisi “to immediately start implementing the proposed development plan and put in place a timetable for completion as soon as possible”, the SCA said.

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Page last modified: 24-07-2021 18:38:44 ZULU