Workers in marine shipping believe that the implementation of the new Suez Canal project its financing through offering investment certificates to Egyptians, is a strong beginning for Egypt that makes it able to implement major projects when there is a desire and a will to achieve them.
They said that the new Suez Canal project is a new beginning for major upcoming projects in the region, and believe that presenting the general outline for the development of the region in parallel with the inauguration of the new canal, will attract foreign investments to Egypt during this period and turn it into a new “economic tiger” on international shipping lines.
The Suez Canal extension work expended over 72km , with 35km done through dry digging, and a further 37km deepened.
Egypt announced the digging of the new canal last September as well as its financing through investment certificates offered to Egyptians.
The Egyptian government collected EGP 67bn within one week, including more than EGP 20bn outside the banking system.
The inauguration of the new canal will receive very good positive reactions on the international level, according to chairman of the Port Said Chamber of Shipping, Adel Ellamei, where the canal will facilitate the movement of international trade. On the local level, there are many aspects, most importantly increasing income and gaining experience in the implementation of major projects within a specific period of time with high standards and efficiency.
The third aspect, according to Ellamei, is that the canal will be an economic lifeline for Egypt that not only involves the collection of fees from passing ships, but also major economic groupings, as the state plans to present a general outline of several projects in the region during the upcoming period.
The Suez Canal Authority fixed passing fees in Suez Canal last year. However, Ellamei believes that the new advantages that companies owning ships will receive from saving 14 waiting hours until passing, allow them to increase passing fees in the canal during this period.
Ellamei believes that the canal’s achieving revenues of nearly $13.5bn in 2023 is not an exaggeration, where the matter will not only involve the collection of passing fees, but also offer many services to ships passing in the canal.
He said that there is a modification in the passing schedule that will allow ships to pass through the canal until 11.00pm instead of 7.00pm, with imposing charges on ships that pass after 11.00pm.
He replied to the claims that global shipping companies began to reduce the number of trips with the increase of capacity, especially in oil containers, by saying that the Suez Canal Authority is increasing fees according to drafts of passing ships.
The depth of the new canal is 27 metres, according to Ellamei, which increases the canal’s ability to receive giant ships. “The daily rent of these ships reaches $150,000 per day, so what will the result be if you save 50% of this cost? Of course this means serving the global trade movement,” he said.
Mostafa El-Ahwal, an investor in maritime transport, said that he hopes that the new canal works on developing ports located along the Red Sea, from Port Said to Ain Sokhna port.There is only one port in Ain Sokhna that is specialised for containers, and it does not take into account the basis of the competition on services that the port provides to companies.
The Red Sea includes five ports for containers. They provide customers with the best services in the light of the competition between them, however, this is not the case in Ain Sokhna, as there is a monopoly in Ain Sokhna Port, according to El-Ahwal, who added that maritime competition in the Red Sea is absent in comparison to the Mediterranean.
There are several economic activities that are not present in the Suez Canal region; however, if these projects were offered to investors, it will strengthen the Egyptian economy. Activities like scrapping, cracking or repairing ships do not exist although they provide many job opportunities and support other heavy industries, most importantly, the steel industry.
El-Ahwal believes that revenues from the Suez Canal will increase with the growth of the Iranian economy after western economic sanctions were removed off it, explaining that Iran is a key player in the production of oil globally.
He believes that revenues will not be large unless projects to serve the international maritime movement were offered.
The revenues of the Suez Canal reached $5.4bn in fiscal year 2014/2015, compared to $5.3bn in fiscal year 2013/2014.
Doctor Ahmed Abdel Monsif, a professor at the Institute of International Transport and Logistics in Alexandria, said that offering logistic projects to serve shipping will double the annual revenues of the canal. They will also serve the Egyptian industry through contributing to the collection of parts for other industries in Egypt, then selling them for lower prices.
Abdel Monsif believes that the Emirati experience in the area of Jebel Ali must be utilised in Egypt.
