Suez Canal expansion announced
By Chris Sleight20 October 2014
The Egyptian government has announced plans for a new Suez Canal waterway to increase capacity of the link between the Mediterranean and the Red Sea. The scheme calls for a new 45 mile (72 km) channel to be built, allowing two-way traffic along part of the route.
At present the Suez Canal is only wide enough for ships to travel in one direction, with a number of passing places allowing two-way traffic. The new channel would run alongside the existing channel, allowing permanent two-way operation along a section of the canal’s 120 mile (193 km) total length.
The cost of the project is put at EG£ 60 billion (US$ 8.4 billion) and is expected to be funded by a combination of a government budgetary allocations and new government debt.
The government has said it will not seek foreign investment for the project and was also looking at ways of setting up a listed company for the scheme that Egyptian citizens could invest in.
The increase in the canal’s capacity is partly in reaction to the expansion of the Panama Canal and proposed new Atlantic to Pacific freight routes in Nicaragua and Guatemala.These new routes could threaten traffic levels for the Suez Canal for ships travelling between Asia and the North American east coast.
The 145 year-old Suez Canal earns some US$ 5 billion per year for Egypt in toll revenues. More than 17,000 vessels use the route each year.