Suez Canal development project

08-03-2014 10:45 AM

Fady Labib- Injy Samy

It has been nothing but political turmoil and economic decline in Egypt ever since the 25 January uprising in 2011, which brought down Egypt’s longtime president Hosni Mubarak and brought in Islamist power. The 33 million-strong corrective revolution on 30 June 2013

resulted in the overthrow of the Islamist Muslim Brotherhood (MB) regime and spearheaded political reform with a civic, consensual Constitution and prospects of presidential and parliamentary elections in the near future. But Egypt still has a long way to go before the economy can be up and running.   
In defiance to the vicious terrorism waged against Egypt by the Islamist MB who resent their overthrow from power, Egyptians have no regrets and are looking forward to a future which they hope would compensate them for the pains and grievances they sustained and are still sustaining on that head. 
Economic revival is pivotal for Egypt to rise from the doldrums. In this respect, the government has announced two megaprojects to be launched in 2014, which should have significant impact on the country’s economy in the near and far future: the Suez Canal Development project, and the Dabaa nuclear plant project.
Integrated industrial commercial zone 
The outset of 2014 saw the call for bids by international firms for the Suez Canal Development Project which President Adly Mansour said would be launched with the formation of joint-stock companies in which shares are offered for public subscription. 
Transport and logistics experts as well as economists stress the importance of rediscovering unexploited areas alongside the Suez Canal, so that the canal would metamorphose from a mere waterway into an integrated industrial and commercial area.  Industries such as ship building and vessel maintenance, and logistical services for passing ships are among the variety of projects which could be hosted in the area. Several new connecting ports should be built; they would grow into important trading towns where large vessels could offload their cargo to smaller ones. 
According to Mohab Mamish, the head of the Suez Canal Authority (SCA), the new project would create a world-class industrial zone and international logistics centre that would provide job opportunities, facilitate the exportation of Egyptian goods, and work to boost commercial, tourist and agricultural projects. Transportation Minister Ibrahim al-Demeiri recommends that 10 per cent of the job opportunities should be allocated to the Bedouin living in the region.
All relevant information has been offered to international consultancies to determine the best options in line with the current and future capabilities of the harbours at East Port Said and Ain Sukhna, as well as the Suez Canal and the industrial zone northwest of Suez.
Mr Demeiri says that a residential area would be built on the east bank of the Suez Canal. Called al-Madina al-Mina’iya (Port City) it would attract people to Sinai which is notorious for lack of investment projects. Young people would be encouraged to settle in the new town by the added incentives of training and work on the project.
Unique canal
“We have to distinguish between the Suez Canal and other canals or waterways and any other huge investment regions,” economist Mukhtar al-Sharif told Watani. “The Suez Canal connects three continents—Asia, Europe and Africa—and its situation in relation to national security is very special because it is the western boundary of Sinai and an essential element that Egypt depends on.”
The Suez Canal’s two huge ports, Sharq al-Tafria and Ain Sukhna, are the only pivotal ports in the region, Mr Sharif says. He proposes building a number of tunnels and bridges, preferably more tunnels, since the area would need more than one method of transportation.
“Ports are no longer mere passageways for imports and exports; they are distribution and economic centres that have added value in the movement of products. The Suez Canal area is unique, so why shouldn’t it be converted into a gigantic regional and international trade point modelled after Dubai, for instance?” asks General Essam Badawi, chairman of the Damietta Port Authority and secretary-general of the Arab ports union.
Saad Eddin Ashmawi, director of the Scientific Arab Foundation for Transportation, says there is need for a political, strategic and military vision to overcome any national security concerns about the project. 
It was agreed that the SCA would be responsible for the project. The Justice Ministry would work in tandem with the SCA to prepare the necessary legislation to define the nature and legal aspects of the project. They would include advantages equal to other international ports to attract international investors. 
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Concerted vision
Yet for all its advantages, the Suez Canal project did not have a smooth start. During their year in power—from July 2012 to July 2013—the MB had attempted to launch the project, but it was met with wide scepticism since it was then seen by Egyptians as an effort to cut away the Suez Canal region from mainland Egypt. The MB project had involved selling the land alongside the canal to foreign investors—notably to Qatar—and allocating the Suez Canal as a separate territory under the direct, exclusive authority of the then MB president Muhammad Mursi.
All this changed once the MB regime was toppled. The new law prohibits foreign ownership. The project would be implemented under the umbrella of the SCA, allocation of land would be made by the armed forces, especially at the northern end where the general development of Sinai was involved. Technical responsibility would fall to the Ministry of Transportation, which would also be responsible for the bids by investors, defining the projects, preparing the technical and financial terms and deciding how long the project would last, according to budget. The committee also agreed to a Transport Ministry proposal to include the Mediterranean port of Dumyat (Damietta), some eight miles west of Port Said, and al-Arish in North Sinai to the project.
According to Dr Osman, who is former chairman of the Arab Contractors, the investment will be through usufruct for 100 years, in addition to tax exemptions and other benefits to attract foreign investors.
The Ministry of Information and the SCA would hold conferences on a weekly basis to explain to the public the phases of implementation. There would also be sessions to hear proposals by organisations, the authorities and the public to enhance the project.
Watani International
9 March 2014
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