Egypt Plans to Build Channel Parallel to Suez Canal

Egypt plans to dig a new channel parallel to the Suez Canal in an $8.4 billion venture to boost capacity at the vital global waterway, marking a new era of regeneration after the 2011 revolution.

Construction of the new passage is scheduled to take three years, though President Abdel-Fattah El-Sisi has ordered it to be completed in a year, Mohab Mamish, head of the Suez Development Authority, said in a televised speech today. The project will reduce maximum waiting hours for ships to three hours from 11 hours, he said.

“As global trade grows and the Egyptian economy needs to develop its sources of hard currency, we had to think about the project of digging a new Suez Canal,” Mamish said. Work will be done by 37 Egyptian companies.

The canal, opened in 1869 to provide a faster shipping route from Europe to Asia, is a vital lifeline in the Egyptian economy, with about $5 billion in annual revenue. The construction plan comes as El-Sisi heralds national development projects aimed at rebuilding an economy battered by political turmoil.

The government is also poised to announce other projects to improve Suez Canal operations. Egypt will announce the winning bidder to design the master plan of the canal development project after the state council reviews contracts, Mamish said.

The Suez, which connects the Mediterranean and the Red Sea, was nationalized by Egypt in 1956, leading to the Suez Crisis that resulted in the waterway being declared open to all countries. About 18,000 ships a year now pass through the canal. The parallel waterway will be 72 kilometers (45 miles) long.

Bloomberg