Improvements to the Suez Canal announced in August are expected to provide a near tripling of revenue over the next decade and see transit times reduced from 18 to 11 hours, according to new information provided by the Suez Canal Authority (SCA).
SCA maritime analyst Dr. Hossam Abdelkarim told Rescon 2014 in Dubai this week that a new $8.4bn 72 km channel, involving 35 km of dry digging and 37 km of expansion and deepening between Kilometres 60 and 95, would speed up traffic through the canal to boost Egypt’s economy. He said that project work began in August and, “This giant project will [mean] creation of a new Suez Canal parallel to the current channel of a total length of 72 km.”
He said annual revenues were forecast to hit $13.2bn in 2023, up from $5.1bn today, with canal capacity almost doubling to 97 standard vessels per day, up from today’s 49. Draught is currently 20.1 m. Suez Canal throughput as a share of global trade peaked in 2007 at 8.8% and is now around 8%.
Introduction of a long-haul rebate system means that sailing through the canal rather than around the Cape of Good Hope becomes more attractive, particularly in high bunker pricing environments. Reductions would be decided case-by-case after studying the total costs for vessel transit via the Suez Canal versus alternative routes, he said. Toll discounts of 20% for VLCCs in ballast condition from the Caribbean and US Gulf are now also possible.
Confidence in the future of the canal as a source of hard currency is buoyant in Egypt. Abdelkarim said that Egyptian investors stumped up $9bn for 12% certificates in eight days to fund the new canal development. The Suez Canal Area Development Project is also moving forward. Port Said, Ismailia, Suez and Ain El Sokhna are all expected to see new industrial and logistics centres for import and re-export.