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The New Suez Canal – Expanding Egypt’s Horizon

The New Suez Canal – Expanding Egypt’s Horizon

Egypt is setting the precedent of creating a major, long-term growth project of some kind every century. This century’s national project is the widening and increased efficiency of the Suez Canal (Qanat as-Suways). Egyptian President Abdel Fattah el-Sisi started his announcement of the project in August, 2014 with a prayer, “In the name of Allah, the most compassionate, the most merciful. In the name of the great people of Egypt . . . ” and finished it by saying, “I hope that on this day next year, God Willing, we celebrate the opening of the new canal.”

Anticipating a massive increase in world trade, due to free trade agreements being worked out by Europe, the United States, and the Far East, Egypt is restructuring its sea level Suez Canal to enable two-way passage of giant modern container ships. As part of the project, the country is adding shipping services, manufacturing, tourism, and farming opportunities that will create long-term jobs for the Egyptian people.

This is not the first time Egypt has tried to connect the Red Sea with the Mediterranean Sea. Connection channels started way back in pharaonic times, in 1874 B.C., with Senausert III attempting to make passage for warships and stone transport from the Red Sea to the Nile River. That canal was abandoned due to silting, but was followed by more ambitious attempts by four subsequent pharaohs, then one by the Romans in 117 A.C., followed by Islamic Amro Ibn Elass in 640 A.D.

The first canal to actually connect the Red Sea with the Mediterranean, itself, opened for navigation on November 11, 1869. It was built by France, Egypt and Britain, in spite of political and economic difficulties with each other. Egypt nationalised the canal in 1956, suffered through twenty years of uncertainty and several closures, then reopened it in 1975. The Suez is now the longest canal in the world without locks at a length of 120 miles. It has comparatively few accidents even though transport is continuous, day and night.

Over the years, the Suez Canal has become one of the world’s most heavily used shipping lanes. Ships travel from trading centres in the Far East like Hong Kong, Singapore, and Malaysia west around India and up through the Suez Canal to reach European ports. Passing through the canal, a container ship travelling from Tokyo to Rotterdam travels 18,000 kilometres (11,192 miles), saving the 5,335 additional kilometres (3,315 miles) it would have taken to go down around the African Cape.

The world’s most heavily used method of transporting goods is maritime shipping – more than 80% of goods, representing 72% of the world’s trade value, are transported by container ships. To accommodate the load, ships today average 51 metres wide (167 feet) and 365 metres long (four football fields), with nearly all of that space reserved for carrying cargo. Big ships can carry around 13,350 six-metre (20 foot) cargo containers. Giant dockside cranes stack them 18 to 22 high on the big ships, necessitating that ships have a deep draft.

The Egyptian government is initiating, designing, financing, and managing the current Suez Canal expansion project to open the canal up to accommodate these larger sizes. Egyptians have already contributed 80% of the £5.6 billion ($8.7 billion) estimated cost, in exchange for a 12% annual return on their investment. The expansion project has four main goals: To facilitate the increase in international trade, to provide essential services to international container ships, to rebuild the Egyptian economy (tolls are an importance source of Egypt’s income), and to give its people jobs for current and future generations.

Egypt intends to become an international logistics centre, increasing the daily number of transiting vessels from 49 to 97 ships by 2023. The project will streamline transit through the canal by simplifying and increasing the length of its two-lane section to 80 kilometres (50 miles) – 42% of the canal’s 190 kilometres (120 miles) length – and widening and deepening each lane to 24 meters (almost 79 feet). The rest of the canal will be deepened to at least 20 metres (66 feet).

The government has already signed contracts with two international consortiums to carry out the dredging work: One to the joint venture NMDC (Van Orrd, Royal Boskalis N.V.) located in Abu Dhabi and Jan de Nul from Belgium, and the other to the joint venture of Dredging International N.V. and the Great Lakes Dredge & Dock Company LLC. The 1st consortium is constructing a new shipping lane parallel to the existing one, while the 2nd consortium is widening and deepening the existing western shipping lane.

Construction began in August, 2014 and will take one year to complete (2015). When asked why foreign companies were being hired instead of local ones, Admiral Mohab Mameesh, chairman of the project, replied that, “such companies own giant dredgers and huge capabilities that are not available locally, however, they shall work side by side with the SCA’s fleet of dredgers.”

The new construction part of the canal project includes building dockside ship repair and refuelling facilities and massive container storage yards, allowing Egypt to provide essential services to the cargo ships that pass by its six ports. These facilities will also provide container moving, ship repair, fuelling, cleaning, and other jobs for Egyptian workers.

To maximise benefits from goods being transported through the canal, the plan will build two industrial parks for manufacturing products – like furniture, glass, textiles, electronics, or cars – and providing value-added manufacturing of base products shipped through the canal. Electronic communication centres may well be based here as well.

On the eastern side of the canal, the project includes construction of miles of fish farming facilities, with the intent of providing jobs for people in the Sinai and food for the world’s increasing population. Its water discards will be used to fertilise agricultural crops and animals, trees, and drought tolerant plantings.

To replace the homes of families moved out of construction areas, as well as provide homes for new workers moving canal-side from densely populated cities, Egypt plans to construct several residential and urban centres in the Canal Zone, the Sinai side of the canal, and neighbouring areas. Desalination plants will provide water for these areas.

Environmentally speaking,18 scientists who signed the United Nation’s commitment to preserve the world’s ecological niche’s (Egypt signed too) have been worrying about the inadvertent transportation of organisms from the Red Sea to the Mediterranean ecosystem. Nearly 350 organisms have already crossed over and some have caused serious destruction of Mediterranean habitat over the years. In response to the worry, Executive Secretary of the UN Convention of Biological Diversity, Braulio Ferreira de Souza Dias, requested that Egypt conduct an environmental assessment to prevent foreign organisms from making that transit, still pending.

Economically, with the increase in canal tolls ($130,000 per ship minimum), revenue from providing shipping services, tourism, and all the new jobs created, Egypt expects to increase its national revenue from $5.3 billion to $13,226 billion by 2023 – an increase of 259%. This is a lofty goal. However, the canal’s expansion and its related projects was prompted, in part, by the complaints of the populace that the average person was not benefiting enough from Egypt’s economy. With the completion of the expansion, assuming the country can keep itself politically stable, that complaint should no longer be valid. Egypt could then well become an economic exemplar for other countries in the Middle East.

Indeed, Egyptian televisions are encouraging citizens to stay positive, declaiming over an inspiring theme tune, “History has witnessed the Egyptian’s ability to create miracles. The Suez Canal is one of those miracles … a contribution to human life.”

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Written by:

Susette Horspool

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