Egypt wants shipping lines to pay 3 years in advance for Suez Canal  

The Suez Canal Authority and the the Central Bank of Egypt (CBE) have started direct negotiations with several international shipping lines, including Maersk, CMA CGM, and MSC, to prepay transit fees three years in advance. The negotiations included France, Switzerland, and Denmark.

These negotiations complement the negotiations opened by the authority with the representative offices of these lines in Egypt.

The CBE is moving ahead with the authority in the negotiations, especially as deputy governor of the CBE Gamal Negm had held a meeting with head of the Suez Canal Authority Mohab Mamish a day prior to the authority’s first meeting with the shipping lines in which it proposed its plan to support the country’s foreign exchange reserves.

Maersk, CMA CGM, MSC, Hapag-Lloyd, COSCO, and Evergreen are the six shipping lines nominated to complete the negotiations.

Maersk, CMA CGM, and MSC acquire more than 25% of the number of ships transiting in the Suez Canal, noting that the Danish shipping line Maersk acquires 12% of the number of ships.

Based on this ratio, the average value of the transit fees paid by these three lines is estimated at $1.25bn a year, while the average Suez Canal revenue amounts to about $5bn a year.

This will bring the expected average value of the prepaid deposit of the three shipping lines to $3.75bn. The Suez Canal Authority will calculate the average value of transit fees based on 2015 transit data.

The discount offered by the authority on the prepaid fees is a major component of the negotiations.

The Suez Canal offered a 3% discount on the value of transit fees, including marine support services such as pilot boats and tugs; however, the companies wanted to increase the discount value to more than 5%.

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