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Egypt starts digging new Suez Canal section, president says will finish next year

CAIRO - Egypt's president on Tuesday inaugurated the digging of a new section of the Suez Canal, a $4 billion military-led project to expand a key corridor of world trade that he says will be finished next year.

As warplanes flew overhead in a ceremony broadcast on state television from the canal city of Ismailia, Abdel-Fattah el-Sissi said that the new 35-km (22 mile) segment is part of several planned mega projects to boost the country's dilapidated economy.

Egypt is the gatekeeper of the canal, one of the world's busiest water corridors and the strategic link between the Red Sea and the Mediterranean. It is one of Egypt's main sources of income, generating annual revenues of $5 billion.

The canal was opened for navigation in 1869. Its official website says the original construction of the 160-km (99-mile) long waterway took ten years of "excruciating and poorly compensated labour by Egyptian workers, who were drafted at the rate of 20,000 every ten months from the ranks of the peasantry."

The inauguration of the new segment comes on the 58th anniversary of the nationalization of the canal by former Egyptian leader Gamal Abdel-Nasser. State television broadcast images from the event of workers and dozens of bulldozers digging in unison as patriotic music played in the background.

Expansion of the canal has been an issue of national security since the canal connects most of Egypt's territory with Sinai Peninsula, which borders the Gaza Strip and Israel. The region has been invaded several times by Israel, which withdraw from the peninsula entirety in 1982 in accordance with a peace treaty signed in 1979.

The region is also major hub for weapons smuggling, while an insurgency by Islamic militants in the area has been on the rise over the past decade.

During the inauguration speech, el-Sissi, a former army chief, said that the initial plan was to create a whole parallel canal which stretches from the Red Sea to the Mediterranean, although this was cancelled.

"We all know the sensitive situation of Sinai, and this is something that should be of concern to all of us as Egyptians," el-Sissi said, adding that the military will lead the digging of the new canal along with 17 other civilian companies. He stressed that the funding will be purely Egyptian.

Under Islamist President Mohammed Morsi — whose ouster from power el-Sissi led after millions marched to demand his resignation last year — canal investment plans caused an uproar over allegations funding was originating abroad from countries including Qatar — seen as a main foreign backer of Morsi.

The current project was initially estimated to take three to five years. But during his inauguration speech El-Sissi told the head of the Army Engineering Corps, Gen. Emad el-Alfi: "You are mandated, in front of me and the Egyptians, to end this project next year... How? I don't know."

"We are racing against time," he added, referring to economic challenges that led the government to reduce massive fuel subsidies this summer to help reduce a state budget deficit that was running at nearly 10 per cent. Since Morsi's overthrow, Egypt has relied heavily on grants and loans from Gulf countries, especially those at odds with Morsi and his Muslim Brotherhood group.

The head of the Suez Canal Authority, Moheeb Mamish, said that the new canal section will shorten the waiting period for crossing ships crossing from 11 to three hours. It will also increase the number of ships that can navigate the canal simultaneously from an average 23 to 97, he said, adding that the current project will also deepen and widen the existing canal.

Egypt is also planning a second ambitious project that aims to turn the Suez Canal zone into "another Hong Kong," said Adm. Shireen Hassan, former head of the city of Port Said's port, with free trade zones, and logistics and distribution centres where multi-national firms will be lured to set up factories alongside the waterway.

"Egypt is born," said Hassan. "Now we are not talking about bridges or small roads, we are heading to mega projects," he added, where Egypt will benefit from its location in the "backyard of Europe."

Also on Tuesday, unidentified assailants tried to attack a security checkpoint in a Mediterranean coastal area frequented by Egyptian holidaymakers, a security official said under condition of anonymity because he was not authorized to brief the media. Two policemen died in a car crash when they tried to pursue the attackers, he added. The fate of the attackers was not immediately known.

The Canadian Press

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