Egypt in $8.4bn Suez upgrade

Egypt plans to invest $8.4bn to create a waterway running parallel to the Suez Canal, it revealed today.

President Abdel-Fattah El-Sisi has ordered that the new 72 kilometer channel be completed in one year rather than the estimated three, Bloomberg reports.

Mohab Mamish, head of the Suez Development Authority, said during an address on TV today the project will reduce maximum ship waiting times from 11 hours to three. 

“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, according to Bloomberg.

Egypt’s plan will prove most appealing for liner traffic as using the canal for Asia to Europe voyages is far quicker than going via Panama, says Patrick Tye of Gibson Shipping Energy.

Benefits for the crude tanker market appear less obvious given a lack of European demand, but long term the products market could see a positive impact from the project, Tye says.

However, the dimensions of the planned channel have yet to be revealed so it is not clear exactly which vessels will be able to pass through, he adds.

The Suez Canal is worth $5bn a year to the Egyptian economy.