The New Suez Canal project is “Egypt’s gift to the world”, says the chairman of the Suez Canal Authority, Admiral Mohab Mameesh.
If that is the case, then the UAE deserves its share of credit for that.
The construction of a new stretch of waterway — which effectively doubles the canal’s capacity, allowing for two-way traffic — initially had a three-year timeline.
But that was cut to just 12 months on the order of Egypt’s president, Abdel Fattah El Sisi.
The consortium appointed to carry out the US$1.5 billion project, led by Abu Dhabi-based National Marine Dredging Company (NMDC), completed it in nine-and-a-half months.
“We signed the contract on October 15, 2014 and construction was completed by August 1, 2015,” said Yasser Zaghloul, NMDC’s chief executive. “We are very proud, of course.”
The work involved the creation of a 35-kilometre-long parallel canal, which required the dredging of 200 million cubic metres of earth.
It achieved this by bringing together four of the world’s largest dredging contractors — NMDC, Belgium’s Jan De Nul and the Dutch companies Van Oord and Royal Boskalis Westminster. “We had more than 70 per cent of all dredging capacity in the world,” said Mr Zaghloul.
Without this, there would have been little chance of completing the project on time, he said.
“We deployed 26 dredgers and 40 additional equipment — an unprecedented number to have been deployed in a single project,” said Mr Zaghloul.
The contractors also faced the major challenges of securing approval and clearances to use the machines and transporting them to Egypt from all over the world.
The first dredgers began operations within two weeks of the contract being signed.
“Mobilising all the dredgers and staff was a challenge, but we had a really strong logistics team to manage this,” said Mr Zaghloul.
“The difficult thing was to get all the necessary permits. But the [Suez Canal] authority was very proactive.” At the project’s peak, the consortium was dredging 1.5 million cubic metres of earth a month. In one month, it dredged a total of 40 million square metres of material, beating the previous record of 8 million square metres.
The project involved 2,000 people from 45 countries working around the clock to ensure its timely completion.
The Suez Canal Authority expects to increase its annual revenue from $3.5bn to $13.2bn by 2023 because of the new canal and a huge new economic zone created on its banks to drive investment.
William Jackson, an analyst with Capital Economics, said the new canal would help to “raise GDP growth, increase services exports and provide a much-needed increase in foreign currency revenues” as well as boosting government revenues.
“Of course, how immediate the benefits are depends on how quickly the extra capacity in the canal is used.”
He believes the government’s forecast of doubling capacity by 2023 is optimistic, especially given sluggish current global trade levels and the fact that the integration of world markets that took place during the early part of the 21st Century “seems to be running out of steam”.
“As a result, while I think the wider canal will still provide benefits for Egypt’s economy, they may be smaller than expected.”
Despite this, he said that plans to build logistics and manufacturing hubs on the canal’s banks could, if successful, provide an important boost to productivity, employment and living standards.
“Egypt has many of the ingredients to be a successful manufacturing hub — it has a young and growing population, low labour costs, and a geographical position near wealthy European markets.”
NMDC’s shares trade on the Abu Dhabi stock exchange. They are down 20.1 per cent so far this year, but have rebounded from the low of Dh4.30 a share that they touched on June 1. Yesterday the shares closed at Dh5.51.
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