“The Egyptian people’s gift to the world.” This is how the
country’s president, Abdel Fattah el-Sisi has described the ongoing
construction of Egypt’s economical saving grace, ‘New Suez Canal’.
A slightly misleading name given that the work is an extension rather than an addition to the current Suez Canal Zone (SCZ) but the national enthusiasm and long term benefits outlined by the parties behind the project are anything but misleading.
The globally renowned canal route is already a major transit route for international trade and has been developed over the years parallel to growing maritime demands, but with 110 kilometres of the 193.3 kilometre route only a single lane channel still, ship crossings can take up to 12 hours.
The development of further shipping lanes will be complemented by an entire revamp of the industrial area within the SCZ as Egypt looks to capitalise on one of its most prized assets to galvanise a recently flailing economy.
Industry benefits
Bridging the Mediterranean and Red Seas, the Suez Canal may be one of the shortest shipping routes between Europe and Asia but it is also one of the busiest, proving especially prevalent over the years in transporting crude oil, petrochemicals and liquefied natural gas.
The benefits of building a hub for industry around the trade focal point
will therefore bring about advantages for areas of tourism, retail, commercial and financial services as well as enhancing petrochemical business opportunities in the immediate region.
The 72 kilometres of work that will be carried out will include 35 kilometres of dry digging and a similar amount of expansion and deep digging, all within a strict three year period.
Not only will this produce obvious economic potential but will more importantly reduce crossing time for ships by half, doubling carrying capacity a day to 95 ships.
For the cities of Ismailia, Suez and Port Said, this regularity of trade also transforms them into potential, thriving international trading centres.
Financial benefits
From an economic standpoint, the myriad of benefits expands even more significantly. Amid a sustained period of political turmoil and subsequent shortfalls in trade trust and financial stability, the country has been looking for a catalyst to spark it back into life since the welcome inauguration of el-Sisi as president.
It comes as no surprise then, that the new man at the helm is so excited and proactive in optimising the New Suez Canal project.
Initial estimates suggest that revenues from the canal will now reap up to $12.5 billion, a vast increase from the current figure of $5 billion, with the influx of funds in turn used to revitalise the SCZ and surrounding key cities; a lucrative cycle that will certainly be required to first offset the costs going into the project as quickly as possible.
The total 60 billion Egyptian pounds going into New Suez Canal comprises 30 billion into the digging process and the second 30 for building seven new tunnels in Ports Said and Ismailia to connect the Sinai Peninsula to the Egyptian shore; an outlay which the success of debt repayments will largely depend on the immediate success of the expansion and buy-in of the international trade community.
National pride, international influence
Any suggestion that el-Sisi has taken a financial risk in undertaking such a potentially significant project though seems to have been outweighed by the investment of the Egyptian population – both in terms of interest and encouragement, and from a monetary perspective.
Refusing to allow foreign investors into the project, the President instead urged the public to fund the project through a stock market IPO; a plea that only took two months to come to fruition when the country’s central bank confirmed that it had purchased the $8.5 billion worth of investment certificates.
Reports suggest that in actuality, the crux of the fundraising only took eight days to complete adding substantial support to the inner financial circle which had already witnessed the country’s stocks rise to the highest level in six years in the immediate aftermath of el-Sisi’s announcement.
Egypt’s economic rival is therefore now intertwined with New Suez Canal, breeding not only economic prominence, but also a sense of national pride that had somewhat lost its way over the past decade.
Its largest and most successful fundraising initiative in history has helped lay the foundations for future trade, industry and business on an international scale, and with the dredging operation – incorporating leading international partners such as Royal Boskalis and Van Oord – already underway, the exciting future of one of Egypt’s most iconic features is quickly taking shape.
A slightly misleading name given that the work is an extension rather than an addition to the current Suez Canal Zone (SCZ) but the national enthusiasm and long term benefits outlined by the parties behind the project are anything but misleading.
The globally renowned canal route is already a major transit route for international trade and has been developed over the years parallel to growing maritime demands, but with 110 kilometres of the 193.3 kilometre route only a single lane channel still, ship crossings can take up to 12 hours.
The development of further shipping lanes will be complemented by an entire revamp of the industrial area within the SCZ as Egypt looks to capitalise on one of its most prized assets to galvanise a recently flailing economy.
Industry benefits
Bridging the Mediterranean and Red Seas, the Suez Canal may be one of the shortest shipping routes between Europe and Asia but it is also one of the busiest, proving especially prevalent over the years in transporting crude oil, petrochemicals and liquefied natural gas.
The benefits of building a hub for industry around the trade focal point
will therefore bring about advantages for areas of tourism, retail, commercial and financial services as well as enhancing petrochemical business opportunities in the immediate region.
The 72 kilometres of work that will be carried out will include 35 kilometres of dry digging and a similar amount of expansion and deep digging, all within a strict three year period.
Not only will this produce obvious economic potential but will more importantly reduce crossing time for ships by half, doubling carrying capacity a day to 95 ships.
For the cities of Ismailia, Suez and Port Said, this regularity of trade also transforms them into potential, thriving international trading centres.
Financial benefits
From an economic standpoint, the myriad of benefits expands even more significantly. Amid a sustained period of political turmoil and subsequent shortfalls in trade trust and financial stability, the country has been looking for a catalyst to spark it back into life since the welcome inauguration of el-Sisi as president.
It comes as no surprise then, that the new man at the helm is so excited and proactive in optimising the New Suez Canal project.
Initial estimates suggest that revenues from the canal will now reap up to $12.5 billion, a vast increase from the current figure of $5 billion, with the influx of funds in turn used to revitalise the SCZ and surrounding key cities; a lucrative cycle that will certainly be required to first offset the costs going into the project as quickly as possible.
The total 60 billion Egyptian pounds going into New Suez Canal comprises 30 billion into the digging process and the second 30 for building seven new tunnels in Ports Said and Ismailia to connect the Sinai Peninsula to the Egyptian shore; an outlay which the success of debt repayments will largely depend on the immediate success of the expansion and buy-in of the international trade community.
National pride, international influence
Any suggestion that el-Sisi has taken a financial risk in undertaking such a potentially significant project though seems to have been outweighed by the investment of the Egyptian population – both in terms of interest and encouragement, and from a monetary perspective.
Refusing to allow foreign investors into the project, the President instead urged the public to fund the project through a stock market IPO; a plea that only took two months to come to fruition when the country’s central bank confirmed that it had purchased the $8.5 billion worth of investment certificates.
Reports suggest that in actuality, the crux of the fundraising only took eight days to complete adding substantial support to the inner financial circle which had already witnessed the country’s stocks rise to the highest level in six years in the immediate aftermath of el-Sisi’s announcement.
Egypt’s economic rival is therefore now intertwined with New Suez Canal, breeding not only economic prominence, but also a sense of national pride that had somewhat lost its way over the past decade.
Its largest and most successful fundraising initiative in history has helped lay the foundations for future trade, industry and business on an international scale, and with the dredging operation – incorporating leading international partners such as Royal Boskalis and Van Oord – already underway, the exciting future of one of Egypt’s most iconic features is quickly taking shape.
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