Egypt Mobilizes To Build the New Suez Canal


Under the leadership of President Abdel Fattah al-Sisi, Egypt has joined the drive for a new world economic order launched by the BRICS countries at their July summit in Brazil. Great projects are underway for a New Suez Canal (which we discuss in Part I of this report), and the Toshka Project to irrigate a half a million hectares of Egypt’s western desert, and build new cities for millions of Egyptian citizens (Part II).

On Aug. 5, President al-Sisi presided over the ceremony commencing the construction of the New Suez Canal, as we reported in our Aug. 22 issue. By the next day, under the supervision of the Egyptian Army Corps of Engineers, 7,500 workers began digging. The goal is to double the throughput of the canal. Since it was nationalized by President Gamal Abdel Nasser in 1956, the cross-section of the canal has been enlarged by 400%, allowing it to accommodate the largest container ships and almost all of the largest bulk carrier and oil tanker classes. But today it has become a transportation bottleneck.

Egypt is the most populous nation in the Arab world, and it also lies on the path of the Maritime Silk Road and the Silk Road Economic Belt, which Chinese President Xi Jinping announced last October. The realization of these projects will open the way for development on a scale never seen on this planet. In allying with the efforts of the BRICS (Brazil, Russia, India, China, South Africa), Egypt can play a pivotal role in stopping the wars and sectarian conflicts that British-centered imperial forces have unleashed throughout Southwest Asia and Africa.

The potential for an African alliance for development is shown not only by recent developments in Egypt and South Africa. Ethiopia has resolved many of its internal political conflicts and is building huge dams for both hydroelectric power and irrigation, while negotiating with neighboring countries for shared use of the waters of the Nile. In the west is Nigeria, Africa’s most populous state and a major oil producer, as well as oil- and mineral-rich Angola and the sleeping giant, Democratic Republic of Congo, whose water resources alone could save much of the continent from its current seemingly intractable water shortages.

Wars can only be stopped through the promise of economic development that can raise populations above the demoralization of civil and sectarian strife. This is the case in Egypt, whose internal conflict since 2011 has taken thousands of lives. In launching these mega-projects, President al-Sisi is refocusing the attention of Egypt’s citizens, not on the demoralizing events and internal conflicts of the past, but on building a decent future for their children.

Two Mega-Projects

The New Suez Canal and Corridor Axis aims to double the throughput of the existing canal, which is arguably the world’s most important maritime transit link. The Egyptian plan intends to transform the entire zone of 76,000 square kilometers, with industrial, logistical, and technological centers, as well as universities. The logistics and industrial center in the Suez Canal Corridor will serve as a bridge to Asia, while fostering zones of peace and economic development that will radiate to what are now zones of war and destruction, notably in Israel-Palestine, Syria, and Iraq.

The Toshka agricultural project is located in Egypt’s Western Desert, which is the easternmost extremity of the Sahara Desert. The project will transfer water from Lake Nasser, which is formed by the High Aswan Dam on the Nile, in cooperation with all the nations along the Blue and White Nile, all the way down to the beautiful Lake Victoria (which borders on Kenya, Uganda, and Tanzania).

The most important aspect of these projects is that they can serve as examples of how real economic development is not based on the “cargo cult” model of making the country attractive to foreign investment by low taxes and cheap labor for export-oriented industries that do not really contribute to the development of the nation. An infrastructure-driven policy not only develops the nation, but will also attract foreign investment for productive purposes, as opportunities beyond the so-called advantages of cheap labor reveal themselves, to the benefit of the country as well as the foreign investor.

By their very nature, these two projects are of continental character and impact. For Africa, Egypt (in collaboration with the BRICS) could become a key player in accomplishing the development projects that have either been halted by the criminal policies of the trans-Atlantic empire, or that never left the drawing board. Among these are the Jonglei Canal project, and extending a water-transport/power-development corridor from the Great Lakes Region and East Africa to the Mediterranean (as in the Africa Pass project of Aiman Rsheed[1] and Ethiopia’s dam-building projects). Other projects can also involve an alliance between Egypt and the BRICS, such as the Transaqua Project[2] to refurbish Lake Chad; the Port Sudan-Dakar and Djibouti-Dakar railways, and the Alexandria-Capestad railway project. The development of the war-ravaged Darfur province in Sudan, as well as South Sudan, will become an integral part of these projects.

The great projects now being built in Egypt form a beautiful complement to EIR’s [[ 2012/120607_emergency_program_toc.html]] 2012 “Program for an Economic Miracle in Southern Europe, the Mediterranean Region, and Africa,” which identified the infrastructure projects necessary to fully integrate the region, on both sides of the Mediterranean, into the Eurasian Land-Bridge.

New Suez Canal, Phase I

The New Suez Canal Corridor Development Project will bridge Africa and Eurasia in a threefold manner. The first is its maritime function, linking the seas and oceans of Asia with the Mediterranean and the Atlantic; the second is the land corridor for railways and roads; and the third is an industrial and development hub radiating development to the north and east into Palestine, most immediately the Gaza Strip, Israel, Jordan, Lebanon, Syria, and Iraq, and across Africa.

The Suez Canal is currently a chokepoint for transport between Asia and Europe. Ten percent of the world’s trade, or 18,000 ships per year, pass through this 163 km waterway, which, on average, is only 60 meters wide, at the average rate of 49 ships a day. The fact that the canal allows for only one-way passage forces ships to travel in convoys. Doubling the size of the canal will not only eliminate the need for these one-way convoys, which can cause 30-40 hours of delays; it will also double the number of ships able to pass in one day and will reduce passage through the canal from the current 18 hours to 11.

The first phase of the “New Suez Canal” project entails digging a new 35-km canal parallel to the old canal, from the Mediterranean south to the Bitter Lakes, and then doubling the size of the 37 kilometers of the old canal that lie south of these lakes. This requires the removal of more than 300 million cubic meters of sand. As of this writing, over 20 million has already been removed, through the work of close to 15,000 workers and 52 companies.

This phase of the project will cost an estimated $4 billion. The government will not allow it to be financed with foreign loans or public shares on the stock market. Egyptians well remember that it was through taking out foreign loans to build the canal in the 18th Century, that the British Empire was able to turn the country into its colony.

Financing will be totally internal and will follow the example of Alexander Hamilton’s sale of subscriptions to the Revolutionary War debt of the United States. The Egyptian government will sell debt certificates to Egyptian citizens denominated in 10, 100, and 1,000 Egyptian pounds, bearing 12% interest. Egyptians living abroad can buy certificates in dollars bearing 3.5% interest.

Thus the project will be built and financed by the Egyptian people as a whole.

Many Western shipping specialists have questioned the wisdom of such an expensive project at a time when world trade is stagnating. But Egypt is placing its bets on the BRICS’ planned expansion of trade and economic cooperation, rather than the current system of dumping cheap commodities and raw materials on the collapsing European and North American economies.

For example, China and Asia require an expansion of food imports, especially grains and meat. The Chinese are seeking such imports from Eastern European countries that historically have been breadbaskets of the world, but since the collapse of the Soviet Union, they have had tremendous underutilization of their potential. Those exports will come through the Black Sea and Eastern Mediterranean ports and through the Suez Canal. Grains are carried in Suezmax bulk carriers.

This defines the importance of Suez as a global transport hub linking the Maritime Silk Road, on the one side, and the land routes on the other. They will not compete, but rather complement one another, in multi-modal or combined transport systems that facilitate rapid and efficient world trade.

Today’s long-distance shipping is dominated by super-ships, including tankers, bulk carriers, and container ships that displace up to 150,000 dead weight tons or more, considerably larger than the mightiest U.S. aircraft carriers. The largest of these container ships, the Triple E class operated by the Danish shipping giant Moller Maersk, with a displacement of 165,000 dead weight tons, can carry 18,000 20-foot equivalent units (TEUs), with cargoes valued at an average of half a billion dollars. If these containers were put on a railway, the train would stretch over 100 kilometers. These ships are so large that few ports can accommodate them, and they cannot pass through the Panama Canal or the Turkish Straits (the Dardanelles, Sea of Marmara, and the Bosphorus).

The canal zone’s facilities are to be greatly upgraded, including several ports in the region. On the east side, Port Said, at the Mediterranean entrance to the canal, there is the Suez Canal Container Terminal, a modern terminal used almost exclusively for transshipments. Opened in 2004, it has doubled in size since then, and is now the largest container terminal on the Mediterranean. In addition to expanding the capacity of the container terminal, other types of terminals will be expanded, including the liquid cargo terminal, dry bulk terminal, agricultural shipments terminal, roll-on-roll-off ships terminal, and bunker terminal.

The new super-ships often unload 2,000 or more containers for transshipment to smaller ships and coasters that will call at ports in the Eastern Mediterranean. One of those smaller ports will be in Gaza, which must open as part of a lasting peace with Israel, and will link the new state of Palestine to the Maritime Silk Road. Other ports of call for these smaller ships would be Israel’s two major ports, Ashdod and Haifa, Lebanon’s Beirut, Syria’s Lattakia, Mersin on Turkey’s Mediterranean coast, Izmir on the Aegean, and points on the Black Sea such as Odessa in Ukraine, and the Russian Black Sea ports where Russia plans to build a logistics center to import agricultural products from Egypt and other non-EU nations, in view of the present EU sanctions against it. These smaller ships will also pick up containers headed for Europe’s Atlantic ports.

At the southern terminus of the canal is Port Suez, and, 17 km to the south, on the western coast of the Suez Gulf, is the port of Adabiya. Both are among Egypt’s important industrial centers.

Fifty kilometers south of Suez is Sukhna, which is still under development. This is the first comprehensively planned port and is one of the so-called “third generation ports,” equipped with the most up-to-date technologies to serve export and import operations for general cargo, bulk, and container handling.

The city of Ain Sukhna is home to Egypt’s Special Economic Zone, a joint project with China’s Tianjin Investment Holdings. Opened in 2006, it is modeled after the SEZs in China, which host export-oriented industries. China plans to build five such zones in Africa, where Chinese companies could establish factories. Ain Sukhna is the first.

Railway links between these ports in the south and those in the north will be built in order to allow ships to unload their cargoes for transshipment to points north without going through the canal. In addition, tank farms (depots) for liquid cargoes, grain storage facilities, and bunkering facilities will have to be expanded. Shipyard and drydock capacities will have to be expanded to accommodate the super-ships.

Source from : Article by Dean Andromidas and Hussein Askary