Aug. 5 (Bloomberg) -- Egypt plans to build a new channel parallel to the Suez Canal in a 60 billion Egyptian-pound ($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 and the Egyptian army.
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 new construction may be a landmark for El-Sisi’s tenure, as the newly elected president heralds national development projects aimed at rebuilding an economy battered by political turmoil.
“We will lift our country on our shoulders, we will not leave it or lose it,” El-Sisi said after giving orders for digging to begin. He urged Egyptians to invest, as funding for the project will come from local sources including banks and individuals.
The parallel waterway will be 72 kilometers (45 miles) long and will allow 46 ships to cross “at the same time” compared with an average of 49 ships crossing per day now, Mamish said. The project includes tunnels for motor vehicles and trains.
The government is also poised to announce other projects to improve Suez Canal operations. Egypt will determine the winning bidder to design the master plan for canal development after the state council reviews contracts, Mamish said. Al Mal newspaper reported Aug. 3 that Egyptian and Saudi Arabian branches of engineering services firm Dar Al-Handasah have been chosen for the work, citing unidentified people at the Suez Canal Authority.
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.
To contact the editors responsible for this story: Benedikt Kammel at email@example.com David Risser, Kim McLaughlin