The largest expansion project in the Suez Canal’s history has a completion deadline.
The $8 billion canal project will bring a new lane to the waterway, so that ships can pass through the famed stretch of water in two different directions at the same time, according to the International Business Times. An industrial and logistics hub is also expected to be completed at the same site. The finished project is estimated to represent between 30 percent and 35 percent of the Egyptian economy, Ashraf Salman, the country’s investment minister, explained according to the news outlet.
Behind the project that took 145 years to begin
Since 2011, when then-president Hosni Mubarak was ousted, Egypt has experienced significant economic and political strife, the International Business Times noted. Hopes are that with the Suez Canal expansion project, the country will at least begin taking steps toward recovery. Since taking over Egypt in a military coup last year, President Abdel Fattah al-Sisi has made an economic turnaround one of his top priorities. The Suez Canal had a substantial impact on the Egyptian economy once before, and Cairo has placed faith in the idea that it could happen again.
Ibrahim Mahlab, Egypt’s prime minister, has confirmed that the project should be completed by August, and has urged international investment in the areas around the project site, according to Ahram Online. When the project was announced in August 2014, the one year deadline was questioned by some as being overly ambitious, but it seems Egypt is prepared to remain on the same speedy timeline.
How the expanded canal will help Egypt recover
With the update to the waterway, the canal will be able to handle more traffic without delays. This will allow for more efficient distribution of goods. Currently, the canal allows for the passage of about 49 ships per day, The Wall Street Journal reported. If the expansion goes according to plan, then by 2023, the waterway’s capacity could rise to 97 ships per day. The wait time for ships is expected to fall from 11 hours to just 3 hours with the addition of a new lane.
Cairo hopes that with the passage of more ships, toll revenue will also rise. Currently, the canal takes in about $5 billion annually through tolls, The Wall Street Journal noted. With the new channel, the belief is that Egypt could be raising over $13 billion per year through canal tolls by 2013.