The New Suez Canal: An ideal project and gateway to the future

Ahmed El-Sayed Al-Naggar
Thursday 11 Jun 2015

The new parallel channel of the Suez Canal is a defining development in the history of the waterway. However, it is far greater and more important than being a mere shipping route

In almost two months, Egypt will witness the inauguration of the new parallel channel of the Suez Canal along with deepening the waterway in the Bitter Lakes area. This channel will allow the north and south ship convoys to sail simultaneously in both directions. Thus, it will terminate the long waiting periods of the north convoys, which range between eight and 10 hours.

The new parallel channel is not a wholly and parallel canal to the Suez Canal. It is rather a totally new link that was dug through dry digging for 35 kilometres (i.e., a little bit more than one fifth of the length of the current canal). A deepening operation for 37 kilometres was added in the Bitter Lakes area to allow ships with large drafts to pass in both directions of the canal without stopping.

As much as this development will enable a bigger number of ships to pass, which may double the current number, it will also enhance the role of the canal in world trade traffic and will increase its levies from passage fees. However, the Suez Canal is far greater and more important than being just a waterway that around 18,000 ships pass through annually, carrying one tenth of the international commodity trade at the present time.

This canal is the centre and pivot of an area that can be a global industrial, commercial and touristic hub if it were best employed according to the project executed right now. Even its role in global trade can be maximised in light of finishing the new parallel channel and deepening the waterway, especially that it enjoys an exceptional and unique location at the convergence point of continents, markets and global trade lines.

That ingenious location was not exploited by Egypt in the way that can yield the best revenue, especially in the period following the political settlement with the Zionist entity, when the development of the area and expanding its economic exploitation was possible. The economic significance of the Suez Canal's location lies in low transport and insurance expenses for major global markets.

In light of Egypt's binding agreements regarding free trade zones with all EU countries, Arab countries and Eastern and Southern African countries, the establishment of industrial investment from all the world's countries, and in particular the Far East countries, Russia and the Americas, will be highly feasible for the commodities that these investments produce to enter Egyptian markets and the free trade zones markets with which Egypt has agreements.

As for the establishment of European investment in the Suez Canal zone, and in Egypt in general, it will offer the use of a labour force whose wages average one tenth of European wages, and it offers the opportunity of entering freely the large Egyptian market and the free trade zones markets with which Egypt has agreements.

Moreover, the availability of a great number of mineral and quarry raw materials in Egypt in commercial quantities, and Egypt's proximity to important centres of these natural resources in Africa, and also its proximity to the Arabian Gulf area, which is the global oil reservoir, makes Egypt a candidate for attracting diverse industrial investment from large corporations that own financial surpluses and are searching for opportunities for utilising them economically.

Furthermore, the passage of around 18,000 ships through the canal annually, a number that is expected to double after the current project concludes, qualifies the canal zone to play a role in supplying these ships with fuel and provisions, and qualifies it also to construct ship maintenance and repair basins, and for total ship building basins afterwards. The ships' crews, who exceed one million persons annually, may add new revenue for tourism, if brief tourism and shopping programmes were set up for these crews.

This overall project is a model national project, for it is owned totally by the state and was financed by the people through investment certificates that are similar to a loan from the people to the state. The labourers working in the project, which amounts to more than 41,000 workers and technicians, are Egyptians along with a small portion of foreign technicians who operate giant foreign-owned dredgers.

This project in its first stage — i.e., digging the new parallel channel and deepening the waterway — will allow a doubling of the number of passing ships and the levies obtained from them. The rapidity of this depends on the efficiency of promoting the canal's image, its new capacity and administering public relations with countries and large corporations responsible for global trade transport and the maritime tourism business.

It is noteworthy to mention that global commodities trade is in constant movement and indeed needs a widening of the canal's capacity to absorb a larger share of it. The Suez Canal is associated with reducing the voyage time between the Far East and Europe in comparison with circumnavigating the Cape of Good Hope, with all that that means in saving expenses and time, which is extremely vital in transporting commodities that are easily damaged.

International Monetary Fund statements point out that the increase rate of the volume of international trade reached 2.6 percent in 2013 and 2.9 percent in 2014. It is expected to reach 3.1 percent in 2015. During the last five years it grew at a rate of approximately five percent annually due to the huge increase, amounting to 14.8 percent in 2010, and the large increase, reaching 6.2 percent, in 2011.

I have visited the location of the new parallel channel of the canal, which was previously just hills in the desert. At the time it was decided that a year would be enough for executing the project it seemed that the whole matter was a figment of the imagination. I have visited the location recently and was astounded with what I saw, where the parallel channel is almost done and will be ready for inauguration and operation on time.

This parallel channel is wider by 40 metres than the original Suez Canal and the scene is awesome indeed. It is necessary to point out that reducing the period of executing the project to one year obliged the Suez Canal Authority to rent some giant dredgers beside the authority's dredgers, which alone would have finished the job in three years.

Along the course of the parallel channel, there are a great number of giant dredgers that are leased from Belgium, Holland and other countries and they are operating, along with the Suez Canal Authority's giant dredgers, leveling the bottom of the new parallel channel. Tunnel digging equipment is ready for digging six tunnels, one of which is for the railway, thus launching the biggest linkage between Sinai and the motherland, through impenetrable tunnels that can be protected, instead of open air bridges that are considered easy prey for antagonistic action.

In the past, I wrote about and called for developing the Suez Canal and maximising benefits from it through a comprehensive programme for the area's development and exploiting its legendary and exceptional location. Hence, following this huge project seems a personal matter, in addition to being a duty in a profession whose mission is to present the truth, use science in analysis and consider our homeland and the people's interests before and above anything else.

We can safely say that this project constituted one of the significant factors in moving the economy since the start of work, through offering job opportunities and distributing incomes between individuals and private companies operating there. However, this project's role may be restricted to increasing the number of passing ships and the revenue obtained from passage if the matter stopped at digging the new parallel channel and deepening the waterway.

So, a huge effort must be exerted to achieve comprehensive development for the whole area, benefitting from the exceptional location of the canal in transforming the surrounding area into a national and global centre of industrial investments and transit tourism, storage, transit trade and all forms of services trade. These industrial and services projects when founded can offer significant job opportunities in parallel with the development of the area and successive developmental projects.  

This current project for deepening a part of the waterway and constructing a new parallel channel is a real rescue for the Suez Canal from regional and international threats. The canal's global position would be under threat if Egypt did not develop an approach towards it by enlarging its capacity in serving global traffic.

The Zionist entity, in particular, aspires to link the Zionist Eilat port, established on the occupied Egyptian city Umm-Al-Rashrash, on the tip of the Gulf of Aqaba with Ashdod port on the Mediterranean Sea. Although the probability of executing this Zionist project is high, its huge expenses will be added to the passage fees. Thus, this canal will not able to compete with the Suez Canal.

As for constructing a railway to link both ports in which the ships will unload cargo, to be loaded once again in the other port, this will increase the expenses and risks. Moreover, the Zionist entity, which was established through usurpation and continues in aggression, cannot bear the military risk that such a canal would constitute a water barrier separating the Gaza Strip and a part of the Negev Desert from the rest of occupied Palestine. Furthermore, Egypt, which allowed free international passage in the Straits of Tiran, may find itself obliged to impose fees for passage through the straits if passage will lead to harming its vital economic interests in the Suez Canal.

Anyway, this current project for developing the Suez Canal constitutes an initiative to enhance the standing of the canal and to block any attempt at competition in the vital role it performs for global trade — a role that is beneficial for Egypt and various countries of the world.

I have written many a time regarding possible developmental projects in the Suez Canal area, but since Egypt is about to witness the inauguration of the canal development project, which means giving the starting signal for developmental projects in the region, there is no harm in recalling those projects, such as developing, enlarging and constructing ports for unloading and storage of ship cargo north of the Suez Canal (Port Said, East Port Said Port, Damietta and Al-Arish Port, which is under construction) and south of the Suez Canal (Ain Al-Sukhna, Safaga and Al-Adabiya), and signing prior agreements with large corporations that dominate a considerable part of global traffic to exploit or lease storage locations in these ports that will be transformed into main ports for transit trade.

Establishing projects for the maintenance, repair and building of ships will be most suitable for the nature of the area and the reality of 18,000 ships passing annually in the canal now, which can be doubled in a number of years. Setting up short touristic programmes for 24 hours or two days maximum for passing ship crews who are more than one million persons, and in which they see landmarks in Cairo and Giza and shop from malls that will be constructed in the canal area displaying Egyptian companies' products, including souvenirs.

This would add around two to three million tourist nights to Egypt. This matter needs coordination with local and international tourist companies and corporations owning ships passing through the canal, presenting tempting offers for tourism and shopping in Egypt. Moreover, attracting cruise ships that offer tourist voyages around the world's ports to this area may add a very significant dimension of tourism development to Egypt and the canal area.

The location of the canal area and the low transport and insurance expenses there in comparison with major global markets provide a distinguished edge for establishing industrial investments, especially with large and heavy commodities, such as car manufacturing. Car manufacturing plants, not assembly factories, can be built to satisfy significant local need, which justifies at present establishing a car manufacturing industry, and also for exporting cars to countries connected with Egypt in free trade zones such as Arab, EU and Eastern and Southern African countries.

There are large investment opportunities in the transformative industries based on mineral, quarry, oil and gas raw materials located in this area or in neighbouring countries. These industries can be concentrated in oil refining and petrochemical industry services, depending on Egyptian raw materials or exporting them from neighbouring countries. Industries such as the glass industry can be developed depending on glass sand available in southwest Sinai; a salt industry in North Sinai, Port Said, Suez and the Red Sea, where massive salt sediments are found; a potassium industry in the Red Sea governorate, depending on reservoirs existing in the area located between Hurghada and Ras Gharib, etc.

There is also large potential in building cement, ceramics and refractories plants in general in Middle and North Sinai, where stone clay and limestone are available in those areas. Also industries based on granite ores in South Sinai, where huge reservoirs of granite are found; manufacturing dolomite, which is available in abundance in South and North Sinai governorates; manufacturing manganese, whose ores are found in southwest Sinai; manufacturing turquoise and ornamental stones and transforming them into souvenirs where they are available in raw form in North and South Sinai; and manufacturing black sand found in North Sinai and south of the Red Sea governorate.

There are great opportunities for developing a phosphate fertilisers industry in the Red Sea governorate which lies within the great phosphate ores belt that extends from the Red Sea coast through Sohag, Qena, Luxor, Aswan and the New Valley governorates, reaching the Egyptian Western Desert, up to the international border with Libya.

There are opportunities for developing the extraction and manufacturing of coal from North Sinai and gold and tin from the Red Sea governorate, which has huge ores of gold, a considerable part of which were wasted according to an unfair agreement concerning the Sukkari mine, as I have written here several times before.

The area surrounding the canal, especially in Middle and North Sinai, is suitable to be a main agricultural area where more than one million feddans can be cultivated, and consequently animal breeding and agricultural industries can be founded. These industries are all labour-intensive. The area is well suited to fish farming in boxes on the shores of North Sinai, Port Said and the Red Sea.

These projects will be linked to building other projects for the processing, preserving and canning of fish. The advantage of these projects lies in being small and cooperative and that contribute to moving a population mass of fishermen and agricultural education graduates to lightly populated areas in the Red Sea and North Sinai. This is a major factor in defending Sinai by way of its development and increasing the population mass residing there permanently as a strategic buffer.      

 The writer is the chairman of the board of Al-Ahram Establishment.

Short link: