INTERVIEW: Suez Canal - The only choice

Sayed Ibrahim, Wednesday 6 Oct 2021

In a comprehensive interview with Al-Ahram, Lieutenant-General Osama Rabie, the chairman of the Suez Canal Authority, stresses that "there is no alternative" to the Suez Canal.

Suez Canal: The only choice
General Osama Rabie

In his interview with Al-Ahram, Suez Canal Authority Chairman Osama Rabie reveals many details about this key global waterway and the unprecedented upgrading it has witnessed in recent years as part of the overall development plans in the country.

This interview comes in conjunction with the celebrations of the anniversary of the 1973 October War victory, and deals with the details in the ongoing saga of the second “crossing” of the Suez Canal, which started with the building of the New Suez Canal a few years back.

As a top Egyptian naval commander, how do you see President Abdel-Fattah Al-Sisi’s decision to begin his tenure with a giant project like the New Suez Canal?

The decision was very bold and exhibited a great sense of responsibility. The people’s solidarity with President Abdel-Fattah Al-Sisi during the project’s funding period was an indicator of its eventual success. We were initially considering taking a loan to finance the project of the digging of the new canal. But the president insisted that the canal belongs to Egyptians and that we will not resort to borrowing, and that Egyptians will finance the project themselves.

We were greatly concerned about how to get the financing and the years it would take to get it. But the surprise was that Egyptians financed the project with LE64 billion in only eight days, when we needed to get only LE20 billion, and, therefore, some of these sums were directed to digging new tunnels under the canal.

What is your view on the Ever Given lodging incident?

The captain of the ship made a series of successive mistakes. It is true that the weather was not good and wind speed reached 40 knots. But, I would like to remind you that during the storm in Egypt - in which wind speeds reached 55 knots - we were able to conduct navigation on the canal and under more difficult circumstances than the ship faced.

The salvaging of the vessel on the sixth day of the incident must have been an important moment in the life of the Suez Canal.

In fact, the rescue operation resembled a surgical operation with a scalpel. There are usually losses incurred in rescue operations in the form of injuries to crew members, or the drowning of goods or the drowning of the vessel itself or opening of holes in the ship’s hull and so on.

There were many possible scenarios for dealing with the crisis, including the option of unloading-the-cargo option. However, that option was very difficult to implement because the ship was about 52 metres high and we did not have a crane for such elevations. The ship was also carrying 18,000 containers with each container weighing between 10 to 20 tonnes. An unloading of cargo would have required a whopping six long months to complete! But, in the end, the ship and its cargo came out intact. The vessel worked using its own machinery.

Turning now to the coronavirus pandemic, how did this crisis affect the Suez Canal, and what actions have been taken to minimize that effect?

In 2020, during the first year of the coronavirus crisis, we were able to maintain the level of passage ships and dollar returns. This was the subject of a lot of praise from international organisations, including the Baltic Organisation, which said “it is strange that while world trade retreated by 11.6  per cent and container ships retreated by 16 per cent, the movement in the Suez Canal increased by 6.8 per cent.” They concluded that there is only one explanation: this was due to the success of the marketing policy adopted by the Suez Canal at a time when the Panama Canal suffered losses of 40 per cent of its revenues.

What are the most important features of these flexible marketing policies adopted by the Suez Canal?

There are many details and great efforts. For example, there was constant contact with the owners and customers. We were constantly monitoring for ships that took the route of the Cape of Good Hope and talking to them, and inquiring about the reasons why they did not use the Suez Canal. And after thorough studies, we negotiated to give them discounts. This led to their return again to cross the Suez Canal. These policies helped us not to lose any ship, which led to my selection among the top 10 executive personalities in the Middle East, where I got first place in the Middle East and 10th in the world as the best CEO.

The Suez Canal has started implementing a giant project to develop the southern sector of the canal. How did the idea come about and how long will it take?

The strategic plan to develop the channel through 2023, which was presented to President Abdel Fattah Al-Sisi, included the development of the southern sector and this was scheduled to start next January. This plan also included the establishment of new garages for ships; the digital transformation project of 16 nautical guidance stations along the navigational course; and the upgrading of the dredgers fleet and the launches for the guides. However, after the recent entry of the two largest dredgers in the Middle East into service - the Mohab Mamish dredger and the Hussein Tantawi dredger, we opted to immediately start on the project of developing the southern sector instead of waiting until next January. We presented this to the president during his visit to the canal last May and he approved the decision to start implementation.

What are the details of this project?

The project consists of the development of the canal’s navigational course in the southern sector. It aims at creating a dual zone in the area from the canal’s 122km to 132km mark thus adding 10 kilometres to the New Suez Canal, increasing its length to 82 kilometres instead of 72 kilometres. The project also includes expanding and deepening the Suez Canal’s navigation from the canal’s 132km mark south of the Salty Lakes to the canal’s 162km at the Suez exit of the waterway. The new dual-lane project will improve navigation within the canal and increase its carrying capacity by another six ships. The new dual-lane will cover the equivalent of 25 per cent of the 40 kilometres stretch that has no dual lane in the south sector of the canal. It will include dredging work in the target area for duality at 45 million cubic metres of sand. The expansion and deepening of the remaining 40 kilometres would continue 40 metres to the east, and the deepening of the draft from 66 feet to 72 feet. All this will improve the process of the crossing of ships and increase the area of the waterway. The whole project will take 24-30 months to implement.

Will the entire waterway’s draft be deepened to 72 feet after the completion of this phase?

The deepening of the draft will start from a depth of 66 feet to 72 feet for a distance of 40 kilometres. After that the entire waterway will be deepened in stages to uniformly reach a depth of 72 feet. This will increase the crossing of the giant ships in the canal. Keep in mind that the Suez Canal can now accommodate 92 per cent of the size of an international fleet of ships.

The canal can also currently accommodate the ships of the fourth generation at loads exceeding 240,000 tonnes. Last month, a 17.5-metre-draft, 240,000-ton vessel crossed the canal. Today, all ship designs in the world’s ship arsenals must conform to the Suez Canal’s specifications.

Will the tunnels which have been built under the Suez Canal have an effect on the waterway?

They will not affect the Suez Canal at all because they are built at a depth of 40 metres from the surface of the canal. The largest draft that crosses the canal at the present time is no more than 18-19 metres deep. We have made calculations for any future expansions in the canal and we are ready for them.

In your point of view, how do the tunnel projects under the canal help in the development of the Suez Canal region?

Of course, it helps a lot. For example, trucks used to wait for up to a week for their turn to cross through ferries to and from the east and west of the Suez Canal. But the situation has changed. Crossing between east and west takes place within a period ranging from 10 to 20 minutes. The tunnels are a genius idea and are not less important than the New Suez Canal project. However, they did not get their fair share of media coverage. And by the way, they are fully secure and operate 24 hours a day. The Suez Canal Authority manages and maintains the tunnels. Now you can get out of the Long Live Egypt tunnels to find the New Ismailia city facing you directly and without barriers!

Competing channels and alternative roads are among the challenges facing the Suez Canal. What is your assessment of the danger these channels pose to the future of the canal?

I always say that there are alternative channels, but they are not an alternative to the Suez Canal. We are constantly monitoring these canals - how they impact our canal and by how much, and we are studying how to attract back the ships that these competing canals took away. I cannot tell any country not to operate a channel; everyone is looking for their own interest.

What are the possible effects of the Northern Sea Route on the Suez Canal? What is your assessment of these effects?

The Northern Sea Route operates only four months a year, and only 58 ships pass through it in one year, while 65 ships pass through the Suez Canal as a daily average.

The ships that pass through the Northern Sea Route have specific qualities and giant ships carrying 18,000 containers and loads of up to 240,000 tonnes cannot cross it. It only handles small vessels.

In addition, the cost of crossing the Northern Sea Route is very high because every ship must be preceded by an ice-breaker. It is a costly affair and carries a lot of danger.

Adding to these difficulties is the lack of continuity of maritime transport all year around. Moreover, this corridor mainly serves the inter-trade between the Russian cities themselves and between Russia and its neighbouring countries such as Kazakhstan. These are not your regular customers of the Suez Canal.

In addition to all that, ships that carry high-value goods such as electronic devices and medicines prefer fast and safe passages such as the Suez Canal.

What is the danger represented by the Panama Canal and what is being circulated about alternative routes such as the Silk Road?

At the outset, I would like to emphasise that the New Suez Canal has closed the door to any new canals that friends and enemies intended to establish to compete with the Suez Canal, especially after the canal’s rating has risen and after we have become number one in the world. As for the Panama Canal, it depends on the system of locks, which results in longer periods of time for any crossing. Any competitive waterway that depends on an interchanging system with railways will definitely not affect the Suez Canal.

We have ships carrying 23,000 containers on board that cross the Suez Canal. Can you imagine how many trains these containers need to be transported?  With regards to the Silk Road, it includes land roads, sea routes and railways. The Suez Canal is one of these sea routes. Silk Road ships will pass through the Suez Canal.

What are your expectations for the volume of global trade during the coming period, given that the role of the Suez Canal as an important global player was confirmed during the Ever Given crisis?

There are indications of its improvement, especially after the long lockdown that occurred in 2020. I expect an improvement in the movement of global trade in the coming years, based on the reports of the International Monetary Fund and ship building centres, especially the giant ones, because they give strong indications of the development in the volume of global trade. In addition, there is an improvement in the navigation movement starting from last April compared to the same months of last year. We achieved revenues that amounted to $5,844 billion during the year 2020. During the period from January to August 2021, we achieved revenues amounting to $4 billion, which means that this year’s revenues will exceed $6 billion - the highest revenue in history for the Suez Canal since its inauguration to global trade. It is also a good indicator that 87 ships crossed the canal on 29 September with tonnages of 4.8 million and we collected $22.8 million in revenues in one day.

What is the Suez Canal Authority’s view of the Suez Canal Economic Zone? How could their integration benefit Egypt?

There is already integration between the two sides, especially in promising areas such as East Port Said and Ain Sokhna. The important thing about the Suez Canal Economic Zone is the genius of its location.

East Port Said enjoys the genius of a location and there are no barriers between it and Europe. It can now receive ships of the fourth generation with drafts of 17.5 metres. It has logistical areas to serve industry and trade, and the pharmaceutical and automobile industries have already started in it. This area will represent a vital addition to the prosperity of the Suez Canal because ships coming to the port will necessarily cross the canal, and those coming to it from the south will also reach it through crossing the canal.

I am talking about granting reductions in transit fees for ships that enter East Port Said port and unload cargo there.

It is worth noting that during the past year about 1.2 billion tonnes of goods crossed the canal but we did not benefit from a single tonne of this cargo and we did not add any added value to it.

In addition, the port at the city of Port Said is qualified to carry out the distribution of goods in an area close to the ports of Europe, which will achieve revenues in the handling of cargo and the crossing of the canal.

We will also grant a 50 per cent discount for cruise ships, provided that they remain in Egyptian ports for a period of not less than 48 hours. We have coordinated with the Ministry of Tourism to create programmes for tourists in Cairo. We are also thinking of organising tour programmes for the International Museum of the Suez Canal in Ismailia after its completion, in addition to organising visits for tourists of the monuments and churches in the governorate, and organising cruises on the canal where they can have lunch before completing their journey out of the canal. All this will achieve a great boom for this region of Egypt.

*A version of this article appears in print in the 7 October, 2021 edition of Al-Ahram Weekly.

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