(AFP Photo)
By Islam Attres
The transitional government of Prime Minister Hazem Al-Beblawi announced that it has adopted the development of the Suez Canal as the national project of Egypt in the upcoming period. The cabinet also assigned the Suez Canal Authority (SCA) as the official body for the project’s execution due to its global role.
SCA Board of Directors President Mohab Mumish said that the project would be presented to the cabinet when finalised for review; this is the first step in the right direction of the planning stage in the project’s execution.
He clarified that the first stage of the project would involve preparing pertinent information to facilitate its proposal to consultancy firms with global expertise, and outlining a general plan to complete execution based on the huge capabilities of ports East Port Said, Ain Sokhna, the Suez Canal and the Industrial Zone in Northwest Suez.
Dean of the College of Transportation and Logistics at the Arab Academy for Maritime Transport Dr Khalid Hanafi, who is also a member of Dr Essam Sharaf’s advisory team, said that there are consultancy firms – he declined to give names, but did say that two are American and one each from the Netherlands, Germany, and China, and several other global companies – that have disclosed their plans for entering the tender process for the canal development project and asked for dates. Hanafi added that representatives from those firms and offices spoke with him and revealed their desire to enter into the bidding process, which will begin soon. He added that foreign investors have strong motivations for investing in Egypt.
He stated that the project to develop the Suez Canal would be the engine of the Egyptian economy during the upcoming period. He requested that the government begin sending studies to consultancy firms and adopt the development of the Suez Canal project as a national project. He also requested that the advisory group aiding Sharaf be officially commissioned to finish all necessary studies and present investors with their proposals.
He disclosed that the government had verbally commissioned Sharaf’s advisory team with the monitoring of the development project, and that the team is only awaiting official commissioning.
“Logistic” learned that Beblawi contacted the advisory team to verbally appoint them in order to allow them to prepare until the announcement with their official commissioning is made, which is expected within days.
Hanafi added that the team needs an official commission before it can begin work on the ground. He explained that the current political circumstances have led to a lot of confusion regarding the project.
He stated that the delay of the project is not in the nation’s interest, since there are other countries that seek to take Egypt’s share of global trade by rail and other land routes. He added that the delay has lasted five years and threatens the quality of the project if it lasts longer than necessary.
Hanafi said that the government and state apparatus are immersed in the current political issues, a distraction intended by the nation’s adversaries to hinder its progress. For an improvement in the country’s situation, attention, even if only a little, must be paid to the national economy. He emphasised that the country is in dire need of large projects such as this, which will save it from collapsing.
He described the decision to put the Canal’s project under the umbrella of the SCA as appropriate due to the authority’s experience in maritime and logistical matters.
Hanafi confirmed that the studies of the East Port Said area need minor amendments but that the region will be otherwise ready to launch in a short period time. He emphasised the need for a master plan before work on the project begins.
He added that the Dutch firm DHV completed its study of the eastern Port Said region in 2008. The studies of this area need to be integrated with studies of the other the areas in the Canal zone, including the north western section of the Gulf of Suez.
Regarding the government’s intention to reveal the project to global consultancy firms, Hanafi said that it did not conflict with the work of the national advisory team under leadership of Sharaf; rather, the firm will be given broad plans outlining the project, and it will work under the advisory group’s authority.
He added that the presence of a global firm gives the project an edge in terms of diversity and will help attract investors of many nationalities.
Taher Hazeen, the legal advisor of the advisory team, said that Beblawi met with Sharaf in the last few days and told him that the group should be prepared for the official commissioning from the cabinet.
He added that the team did not know at the moment whether or not the SCA would manage the project, or if another body would be awarded that task, and consequently, whether it would emerge from the Canal Authority or be independent and have a separate organisational structure.
Hazeen indicated that the Canal Authority should be entrusted with monitoring the general plan that Sharaf’s team will execute, which would cease once the official commission is issued by the government.
He went on to say that the vision for the project’s execution is still unclear, as there is no detailed road map. He expressed the team’s irritation at the delay of the studies of advisory plans and stipulates that other countries have developed plans to compete with the Suez Canal for its trade volume and superb geography.
Hazeen demanded that a contract for the project be issued, which includes the establishment of a free zone and free ports which are not subject to regular laws, whether investment, trade, or industrial, in a way the does not harm Egyptian national security. He added that a limited investment climate always causes investors to flee.
He added that any law that is issued must express the technical, financial, and security realities, contrasting this with the investment law at Port Sokhna, which was intended to compete with the Jebel Ali Port in Dubai in the UAE. However, the investment law failed to fulfil the ambitions of the Egyptian people.
Hazeen said that the canal development project should not be delayed any longer. Waiting nine months for the election of the People’s Assembly and then for the process of issuing the law would not be in the interest of the project. He added that one suggested solution for expediting the beginning of the bidding process and completing the remaining studies would be for the president to issue a constitutional declaration that includes a development law for the project.
Hazeen also mentioned that the Suez Canal project envisioned by the advisory team includes the establishment of a critical port in East Port Said that includes an industrial zone exclusively for producing exports. This would include expanding infrastructure for roads, electrical stations and sewers with a rate of funding no less than 80% through IPO or Sukuk loans.
The advisory team’s vision also includes the establishment of factories by global companies and brands in the Canal Zone, and the rate of funding will not exceed 20%. The group has a number of other ideas and visions which will be applied during the project’s execution.
