- Egypt is exploring additional expansions of the Suez Canal to complete a second channel, aiming to enhance shipping capacity and mitigate disruptions.
- The canal has faced a decline in revenue due to recent challenges, including Houthi attacks in the Red Sea.
- Initial studies for the expansion, expected to take around 16 months, will cover feasibility, environmental impact, engineering assessments, and more.
Expanding the Second Channel
The ongoing efforts to extend the second channel by 10 kilometers are set to be complemented by further expansions. These measures were initially accelerated after the Ever Given incident in March 2021, emphasizing the canal’s vulnerability to disruptions.
Financial Impact on Egypt
The Suez Canal is a crucial source of foreign currency for Egypt, contributing significantly to its economy. While revenues reached a record $9.4 billion in the fiscal year ending in June 2023, recent challenges, particularly the Houthi attacks, led to a substantial decline at the beginning of this year.
Comprehensive Study and Funding
Chairman of the Suez Canal Authority (SCA), Osama Rabie, stated that the potential extension would undergo a comprehensive study lasting around 16 months. The study would include various aspects such as feasibility, environmental impact, and engineering assessments. Funding for the project is expected to come from the SCA’s investment budget to avoid additional pressure on the state’s general budget.
Enhancing Competitiveness
Rabie highlighted that the expansion project could significantly boost the competitiveness of the Suez Canal. Enabling the canal to accommodate larger vessels and increased shipping volumes, the expansion aims to solidify its position as a crucial global trade route.
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Source: Reuters
