Elektrans Global

A Bigger, Better Suez Canal

On November 17, 1869, the Suez Canal connecting the Mediterranean and Red Seas was officially opened in a lavish ceremony at Egypt’s Port Said. The canal took more than 15 years to plan and build, and its construction was repeatedly hindered by political disputes, labor shortages and even a deadly cholera outbreak. When finally completed, the 101-mile-long waterway permanently transformed international shipping by allowing vessels to skip the long and treacherous transit around the southern tip of Africa.

The Suez Canal (In Arabic: Qanat as-Suways), is an artificial sea-level waterway running north to south across the Isthmus of Suez in Egypt to connect the Mediterranean Sea and the Red Sea. It is one of the world's most heavily used shipping lanes. The Suez Canal is one of the most important waterways in the world.

Since the inception of The Suez Canal, it has been progressively widened and deepened so that larger vessels could use it. It is extensively used by modern ships , as it is the fastest crossing from the Atlantic Ocean to the Indian Ocean . Tolls paid by the vessels represent an important source of income for the Egyptian government. The Canal runs between Port Said harbor and the Gulf of Suez. The Suez Canal is a sea level Canal. 

The New Suez Canal is a feat of brawn, it is impressive. In just one year, a third of the time engineers wanted, Egypt has shifted enough sand to allow more and bigger ships to pass more swiftly through a crucial artery of global trade. As a political stunt it is big, too. Since coming to power in July 2013 President Abdel-Fattah al-Sisi has offered an unspoken bargain: in exchange for shrinking political freedoms he would bring stability and progress. Small wonder his government declared a holiday for the lavish opening on August 6th of the New Suez Canal, as it dubs its project; to bolster pride in the achievement, its religious-affairs ministry instructed mosque sermons to cite the Prophet Muhammad’s digging of a trench to defend Medina from attackers.

Egyptian officials claim that the $8.2 billion project, which expands capacity to 97 ships per day against the present 49 will more than double annual revenues to some $13.5 billion by 2023. A recent forecast from the IMF suggests that in the decade up to 2016 the annual rate of growth for global merchandise trade will have averaged 3.4%.

Until recently, it was one way traffic therefore, it would take much longer to pass through the canal but more ships will flock to the canal because new bypasses permit faster two-way traffic.

However on the other hand, there are strong critics of the project who foresee the growth respective to the current scenario of world economy  that investors, being citizens of Egypt, have been taken for a ride as no way  the traffic can go up as predicted given the projected dismal growth of world GDP and seaborne traffic. The traffic through Suez has increased only marginally in last decade and while curtailing of transit time is most welcome by shipping community that can't guarantee doubling the traffic in just a few years. To have any decent return on the huge investments made traffic must grow at least by 10% year on year which appears very doubtful given the state of world economy.

The Suez Canal's role is not confined to servicing the world trade.  It goes beyond that to serve the Canal Zone community (Port said, Ismailia, and Suez) as well as other governorates of Egypt.

The Shipping Industry welcomes the development of the new Suez Canal due to its shorter waiting period and transit time and particularly for Indian trade to the west which is a major user of the canal.

A Bigger, Better Suez Canal