Suez Canal can fend off Panama competition – adviser

ISMAILIA: An expanded Panama Canal could win some business from the Suez Canal, its partial competitor on the other side of the world, an adviser to the Suez Canal Authority said on Monday. But the Suez Canal can fight back by adjusting its transit fees to keep it attractive to ship-owners who might be tempted to choose the Panama Canal, adviser Galal El-Dib said. The people of Panama have overwhelmingly backed a plan to give their canal its biggest-ever overhaul, an ambitious project the government hopes will help lift the country out of poverty. The $5.25 billion (over LE 30 billion) face-lift, which would be complete in 2014, will make it possible for ships carrying 12,000 containers to pass through. The current limit is 4,000, while the Suez Canal can already take ships with 14,000 containers. The two canals compete most when a ship s port of departure and destination are roughly on opposite sides of the world. In such cases the transit fees could affect the ship owner s choice of route. The Suez Canal can face this competition by maneuvering with the weapon of fees, in view of the low cost of passage through the Suez Canal, said El-Dib. The Suez Canal has the advantage of not having large debts to pay off after 2014. Its topography also makes it less costly to maintain and expand. The Suez Canal is level throughout its length, while the Panama Canal has a complicated lock system, which raises the vessels up to 26 meters above sea level. El-Dib said the Suez Canal can already handle 99 percent of the world s fleet of container ships, which are its largest single category of customer, and it is undergoing constant expansion. The current target is a draft of 20.1 m by the end of the year.