Business & Industry

Jul 1, 2015

The New Suez Canal

Since 1869, the Suez Canal, connecting the Mediterranean and the Red Seas, has been the main route to link Asia and Europe. Today, with the increase in marine traffic and trade, the Suez Canal is preparing for a new step forward, with the construction of a second waterway, wich will transform Egypt and global commerce.


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The New Suez Canal will expand the existing Suez Canal. It was launched simultaneously with plans to build six new tunnels under the canal and to transform a 76,000 square kilometers area on both banks of the canal into an international logistics, commercial and industrial hub that would "create one million jobs".

The New Suez Canal works are expected to be 72 km long – this will involve 35 km of dry digging, and 37 km of "expansion and deep digging", whereas the whole canal is 164 kilometres long. Six new tunnels for cars and trains are also planned to end the isolation of the Sinai peninsula, connecting it better to the Egyptian heartland. Today, there is only a single tunnel under the Canal, the Ahmed Hamdi Tunnel that connects Suez with the Sinai.

The infrastructure cost of the Suez Canal Development Project in Egypt is likely to reach USD$15 billion, said a top official.

The electricity supplied to the project is expected to be 6 GW, Yehia Zaki, director of operations at Dar Al Handasah Consultants, was quoted as saying in the Daily News Egypt report.

Under the project, irrigation water will be supplied to about 9 million sq km of land, he added.

The Suez Canal project, which is aimed at expanding trade along what is the fastest shipping route between Europe and Asia, includes the development of 76,000 sq km around the canal into an international industrial and logistics hub to attract more ships and generate income.

Officials have said the new development would boost annual revenues from the Suez Canal, which is operated by the state-owned Suez Canal Authority, to USD$13.5 billion by 2023 from USD$5 billion currently.

A global project

On 19 August 2014, 42 companies were selected to work on the canal "under the supervision of the Egyptian armed forces". In October 2014 Egypt signed contracts with six international dredging firms: the National Marine Dredging Company of the United Arab Emirates; Royal Boskalis Westminster and Van Oord, both based in the Netherlands; Jan de Nul Group and Deme Group, both of Belgium; and U.S.-based Great Lakes Dredge and Dock Company. The companies would work in five zones while engineers from the Egyptian Army work in a sixth zone. 

In October 2014 state-owned Arab Contractors and the private Orascom Construction Industries (OCI) were selected to build four tunnels, two for cars and two for railways. In November 2014 the Armed Forces announced that alongside the above contracts, the German firm Herrenknecht was selected to provide drilling equipment to build the tunnels.

On 19 August 2014, a Master Plan for the study of investment opportunities in the Suez Canal area was awarded after competitive bidding to the engineering firm Dar Al-Handasah in cooperation with the Armed Forces Engineering Authority. It is expected to last six months, resulting in an investor's conference in March 2015. Additionally, the French engineering services company Egis Group was nominated by the World Bank to evaluate the performance of the master plan.

During a state visit to Russia, President Abdel Fattah el Sisi said that he had agreed with his Russian counterpart President Vladimir Putin to establish a Russian industrial zone as part of the new project.


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