CAIRO // 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 US$5 billion (Dh 18.37 billion) 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, 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 72 kilometres,” Mohab Mamish, the chairman of the Suez Canal Authority, said in Ismailia, a port town on the canal. His comments were broadcast by state television.
He said the total estimated cost of drilling the new channel would be about $4bn and 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 off journeys between Europe and Asia, otherwise necessitating a trip round the tip of Africa.
Egyptian president Abdel Fattah El 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.
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 El Sisi, who has previously said he would not hesitate to award major projects to help revive Egypt’s battered economy to the army.
Egypt has planned for years to develop 76,000 square km around the canal to attract more ships and generate more income.
Mr El 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” and 37km would be “expansion and deepening”, indicating 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 & Co global management consulting firm.
Gulf allies Saudi Arabia, the UAE and Kuwait donated more than $12 billion in cash and petroleum products to Egypt after the army overthrew former president Mohamed Mursi. But Egypt remains in dire need of longer-term investments.