Egypt has finished its Suez Canal expansion project, which President Abdel Fattah al-Sisi says is both a symbol of national pride and a significant opportunity to stimulate the country’s economy.
The $8 billion project had been projected by many to take three years. However, President al-Sisi ordered the project to be completed in one year because the country urgently needed the economic boost the canal is expected to provide. It comes as no surprise then to learn the streets of Cairo are decorated in advance of tomorrow’s inauguration of the Suez Canal, and that Egypt’s Cabinet has declared Thursday a public holiday.
The new canal, which will allow two-way traffic of larger ships, is expected to expand trade and reduce navigation time through the fastest shipping route between Europe and Asia. The expansion adds an additional lane along part of the vital shipping channel, which officials say will shorten waiting times. It includes 21 miles of new channels cut through the desert and an additional 22 miles where existing bodies of water were dredged to make way for larger ships. Consequently, Egyptian officials say the expansion will cut the time of a north-south passage from 18 to 11 hours, and a total of 97 ships will be able to pass every day—up from a current capacity of 49 ships daily.
The canal drew in a record $5.3 billion last year, and Egypt’s government estimates it can raise that number to $13.2 billion by 2023. However, some economists and shippers maintain that’s an overly optimistic forecast.
“We have successfully completed tests since last Saturday,” says Vice-Admiral Mohab Mamish, chairman of the Suez Canal Authority, in a Euronews article. “Three large ships sailed through the canal. These vessels passed safely and securely, which proves to everyone that the new canal is already safe for navigation.”
It’s still amazing that the expansion project has been completed so quickly. To complete the project in a year, the Egyptian government hired six international firms—including companies based in the U.S., Belgium and the Netherlands—to dig new sections of canal and dredge the existing waterways, according to an article in The Guardian. Those companies worked day and night—under military direction—on six separate sections of the project.
“This is a huge undertaking on a world scale,” says Peter Hinchliffe, secretary general of the International Chamber of Shipping, in The Guardian article. “It has been completed in a time that is frankly astonishing.”
What’s even more impressive is the impact Egyptian officials expect from the expanded canal. Indeed, the Egyptian government had already planned to also expand port and shipping facilities around the Suez Canal as part of the country’s strategy to increase its international profile and establish Egypt as a major trade hub. Last year, Egyptian leaders announced plans to develop a logistics hub. Those plans call for the development of approximately 76,000 square kilometers around the Suez Canal to create an international industrial and logistics hub which, Egypt’s leaders believe, will further boost the country’s economic development.
What are your thoughts on the impact of the expanded Suez Canal? What will the faster shipping times mean to your supply chain?