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The Suez Canal Corridor Area Project (Arabic: مشروع تطوير محور قناة السويس) is a mega project in Egypt that was launched on 5 August 2014 by president Abdel Fattah el-Sisi. The project’s aim is to increase the role of the Suez Canal region in international trading and to develop the three canal cities: Suez, Ismailia, and Port Said.
The project involves building a new city (new Ismailia city), an industrial zone, fish farms, completing the technology valley, building seven new tunnels between Sinai and Ismailia and Port Said, improving five existing ports, and digging a new canal parallel to the Suez Canal. The new canal will increase the canal capacity by allowing ships to sail into both directions at the same time for a greater proportion of the canal. The project will transfer the canal cities into an important trading center globally. It will also build new centers on the Suez Canal for logistic and ship services.
el-Sisi announced that the new Suez Canal project will operate after a year (instead of three years). The project’s authority said that the revenues of the canal will increase from 5 billion dollars to 12.5 billion dollars yearly. The new Suez Canal and the seven tunnels are under construction simultaneously. Construction of the rest of the projects (which include building the city, industrial zone, technology valley, and fish farms) will begin in February 2015.
The project is also known as “The Great Egyptian Dream” because it will help the economy of Egypt reheal after many years of unrest and corruption.
The Egyptian Armed Forces participate in the project by helping in designing and digging the canal and the tunnels. It also protects the project’s location from terrorists in Sinai.
The Suez Canal Corridor Developing Project dates back to 1970s when Hassaballah El Kafrawy (former Minister of Housing) proposed the project to President Anwar al Sadat, but due to problems, the project didn’t start. He proposed the project again to Hosni Mubarak in the 1990s but it did not work either. Engineer Hassaballah El Kafrawy sought to turn the canal corridor into an important international region rather than just a passageway for ships.
In 2008, the former Minister of Transportation Mohamed Mansour again proposed the project. However, the Egyptian government again did not take any serious steps to start the project.
In 2012, the Muslim Brotherhood introduced a development project for the Suez Canal region during the presidential elections. In 2013, Prime Minister Hesham Qandil began studying the project and announced that the government would begin to plan for the project.
New Suez Canal
New Suez Canal close up
The New Suez Canal (Egyptian Arabic: قناة السويس الجديدة Kanāt El Sewēs El Gedīda) is the name of an artificial waterway project in Egypt which created a second shipping lane along part of the Suez Canal. Also, other parts of the Suez Canal were deepened and widened. The project was inaugurated by the Chairman of the Suez Canal Authority Mohab Mamish in the presence of Egyptian President Abdel Fattah el-Sisi on 5 August 2014. The new canal was opened one year later in a ceremony attended by several international dignitaries including the then French President François Hollande.
The New Suez Canal is expected to expand trade along the fastest shipping route between Europe and Asia. The new canal allows ships to sail to both directions in the same time. This decreases waiting hours from 18 to 11 hours for most ships. The expansion is expected to double the capacity of the Suez Canal from 49 to 97 ships a day.
The New Suez Canal is 72 km (45 mi) long, including 35 km (22 mi) of dry digging, and 37 km (23 mi) of “expansion and deep digging” to provide a second shipping lane in the existing 164-kilometre-long (102 mi) canal, allowing for separated passing of ships in opposite directions. It also includes the deepening and expansion of a 37-kilometre-long (23 mi) section of the existing canal. The construction, which was scheduled to take three years, was instead ordered by the President to be completed in a year. The chairman of the Suez Canal Authority announced that the revenues from the Suez Canal (after the completion of the New Suez Canal) will jump from 5 billion dollars to 12.5 billion dollars annually. The Egyptian government said that these revenues will be used to transform the cities along the Canal (Ismaïlia, Suez, and Port Said) into international trading centers. The government has also said that many new projects in the Suez province are being studied as a result of enlarging the Suez Canal capacity, such as building a new industrial zone, fish farms, and the completion of the valley of technology (wadi al thechnologia).
The project cost around 30 billion Egyptian pounds and no foreign investors were allowed to invest in the project, but rather Egyptians were urged to participate in funding the project through bank certificates of deposit initially yielding 12%, later raised to 15.5%. After President Sisi announced the new megaproject, Egypt’s stocks rose to the highest level in the past six years. The Egyptian Armed Forces participated in the project by helping in digging and designing the canal.
The enlarged capacity allows ships to sail in both directions at the same time over much of the canal’s length. Beforehand, much of the canal was only one shipping lane wide, with limited wider basins for passing. This is expected to decrease waiting time from 11 hours to 3 hours for most ships, and to increase the capacity of the Suez Canal from 49 to 97 ships a day.
Technical difficulties initially arose, such as the flooding of the new canal through seepage from the existing canal. Nevertheless, work on the New Suez Canal was completed in July 2015. The channel was officially inaugurated with a ceremony attended by foreign leaders and featuring military fly-pasts on 6 August 2015, in accordance with the budgets laid out for the project.
Benefits, Costs, and Risks
Egyptian officials especially the chairman of the Suez Canal Authority, Vice-Admiral Mohab Mamish stated that the $8.2 billion project, which expands capacity to 97 ships per day, will more than double annual revenues to some $13.5 billion by 2023. That, however, would require yearly growth of 10%. 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%.
About 18 scientists writing in the academic journal Biological Invasions in 2014 expressed concern about the project impacting the biodiversity and the ecosystem services of the Mediterranean Sea. They called on Egypt to assess the environmental effects that the canal expansion could cause, a request echoed by the executive secretary of the Convention on Biological Diversity. Over 1,000 invasive species have entered the Mediterranean Sea through the Suez Canal since its original construction in the mid-19th century, with human activities becoming a leading cause of the decline of the sea’s biodiversity, according to the European Commission’s Joint Research Centre.
Initially, the project was to be financed through a stock market IPO, allowing partial private ownership of the project. However, the government quickly changed its financing strategy, relying on interest-bearing investment certificates that do not confer any ownership rights to investors. The certificates were issued by the Suez Canal Authority with an interest rate of 12%.
The government has blocked access to the official revenues reports for three months after the opening. It then published two reports for August and September, which showed consecutive decreases in the total Suez Canal revenues by 10% or $150 million.
Seven New Tunnels
The chairman of the Suez Canal authority announced that seven new tunnels will be dug to connect the Sinai Peninsula to the Egyptian homeland. Three tunnels will be dug in Port Said (two for cars and one for railways) and four will be dug in Ismaïlia (two for cars, one for railways, and one for other special uses).
The tunnels will cost 4.2 billion dollars (approximately about 30 billion Egyptian pounds). The first three tunnels will cost 18 billion Egyptian pounds and Arab Contractors and Orascom are the builders for this project. The Armed Forces Engineering Authority are normally tasked with infrastructure projects and will help with digging the tunnels.
The Al-Nasr floating bridge to enable people to easily travel back and forth between Port Said and Port Fouad was built successfully and inaugurated in late 2016. The bridge extends from opposite banks, with the help of tugboats that push both parts until they connect to form a bridge that can be traversed by cars. It is 420 meters long. This was an important step towards the efficient movement of equipment and manpower.
The technology valley is an old project that has stopped for about 17 years and now the government announced to re-continue the project. The project’s location lies on the eastern part of Ismaïlia city and consists of four stages: the first stage covers 3021 acres, the second stage covers 4082 acres, the third stage covers 4837 acres, and the fourth stage covers 4160 acres. However, before seventeen years when the project started it completed only 108 acres and then stopped for seventeen years.
The technology valley will be the first step in starting Egypt’s electronics industry for manufacturing technological devices.
This project will cover 910 acres of land north west of gulf of Suez. The first stage of the project covers 132 acres and it is done with a cost of 20 million Egyptian pounds. The second stage is 132 acres and it is not yet done. Currently there are 23 factories operating and 56 still under construction. upon finishing the project it will provide 9386 work opportunities.
The chairman of the Suez Canal authority announced that the government will build eighteen new factories in the industrial zone which will include: glass factory, car assembling factory, electronics factory, medicines factory, textiles factory, furniture factory, paper factory, sugar factory, food factory, petrochemicals factory, petrol refining factory, light metal manufacturing factory, and a minerals factory.
The chairman of the Suez Canal authority also said that ship factories and services will be built among the Suez Canal corridor which includes: catering and services center for ships, ship manufacturing and repair center, a center for manufacturing and repairing containers, and logistic redistribution centers.
New Ismailia City
This project will create “New Ismailia City”, which will cover 16500 acres of land. This new city will be created to accommodate approximately 500,000 Egyptians in order to relieve the pressure from the crowded towns of Cairo and the delta cities. The location of this city is designed to accommodate the workers of the nearby Wadi Al-technologiya (Technology Valley) which will be built in following years.
The National Project for Fish Farming, new fish farms were built on the eastern side of the Suez Canal. The project includes twenty three tanks that cover 120 square km with depth of 3-5m. It covers the area from southern Tafrea to the gulf of Suez. This project is designed to produce high quality fish food. The project included the building of solar panels that produce Up to 2500 megawatts and reform 400,000 acres of land in northern Sinai into farming land using the El Salam Canal.
Russian Industrial Zone
During a state visit to Russia, President Sisi said that he had agreed with his Russian counterpart President Vladimir Putin to establish a Russian industrial zone in the new project. However, no more information was given about the project. So the Russian industrial zone is still a proposed project with no studies so far.
Developing Existing Ports
Western Port-said Port
Western Port-said Port lies on the northern entrance of the Suez Canal and is considered one of the most important ports in Egypt because of its location on the entrance of the Suez Canal.
The port covers an area of 2.9 square km (the land area is 1.2 square km and the remaining 1.7 square km is water area). The port contains 37 docks which includes docks for passengers, yachts, and general goods. The port is divided into stations and each station contains a number of docks with its own working area (that includes repairing centers, equipment center, and stores). The maximum capacity of the port is 12 million tons yearly.
Eastern Port-said Port
Eastern Port-said Port lies on the north western entrance of the Suez Canal branch which is a unique location because it connects 3 continents. The design of the port is geometrically ideal. The port was built in 2004 to serve international trading and act as a transit center between the continents.
The port borders the Mediterranean Sea from the north, the industrial zone from the south, the salty lakes from the east, and the Suez Canal branch from the west. The port covers an area of 35 square km.
The port authority plans to build docks the will reach 12 km long and an industrial zone south of the port covering 78 square km. Three stages are still remaining to fully complete and improve the port:
- Stage one is creating 8 stations with docks 8 km long
- Stage two is creating 15 station with docks 16 km long
- Stage three is creating 21 stations with docks 25 km long
El-Sokhna Port lies on the southern entrance of the Suez Canal.
The port’s total size is 24,919,337.85 square m:
- 3,400,000 square m is the water area
- 21,519,337 square m is the land area
- 1,000,000 square m is the Customs center
- The largest dock’s size is 7 km long and 5.5 km wide
In 2008, an Emirati company bought the port and announced the plan to build a new 1.3 km dock to work with more than 1 million containers yearly. It also said that a general goods center will be built.
The port serves the oil and gas fields in the region. It exports products from the petrochemicals and refining factories in Ein al Sokhna region. It also exports the products of a ceramic factory, ammonia factory, and a sugar factory.
Arish Port lies on the Mediterranean Sea on the northern coast of Arish city. in 1996 the port was transformed from a fishing port to a trading ships port.
The port contains a dock which is 242m long that can serve huge ships. There is another dock which is 122m long that serves smaller ships. The port also includes covered storage areas which cover 2 square km and non-covered storage areas which cover more than 2.7 square km. On 5 June 2014 the port was no longer controlled by the Port Said port authority, the Ministry of Defence took control of it due to its sensitive location. The port contains a lighthouse that can be seen from up to 18 miles. The main importance of the port is that it exports Sinai products to the Mediterranean countries.
- Build a 2 km dock which will include containers station and a general goods station
- Build new storage areas
- Build a dock for yachts
- Build new logistic centers
El-Adabiya Port lies on the western side of the Suez Canal, about 17 km from Suez city. The Red Sea Ports Authority in Egypt controls the port.
El-Adabiya Port consists of 9 docks which reach 1840m long and 42–27 foot deep. the water area is about 158 square km (which is also shared with the Suez Canal port and Petroleum Dock port) and the land area is 0.8 square km. The maximum carrying capacity of the port reaches 6.7 million tons yearly.
In 2014, the Suez Canal Corridor Project Authority announced that El-Adabiya Port will be improved after the completion of the new Suez Canal to serve more ships.