The Suez Canal Authority has announced a programme of dredging and construction aimed at improving the capacity of the canal. On Saturday, May 15, Osama Rabie, the chairman of the authority said that the organisation would embark on a project to deepen the southern entrance of the canal and extend the double channelling in the central part of the canal system, southwards by 10km.
Effectively the work represents an extension of the ‘New Suez Canal’ project that was completed in 2015. That was designed to increase the capacity of the canal by doubling the number of vessels that pass through it every 24 hours.
The incident with the container vessel EVER GIVEN highlighted that even after the substantial widening of the canal, it is still vulnerable to blockage. Indeed, it is possible that the canal authorities underestimated the continued growth in the size of vessels when they embarked on the ‘New Suez Canal’ project ten years ago.
Even the newly announced developments still leave large parts of the canal as one channel. The ‘New Suez Canal’ project really focussed on increasing space for manoeuvre around the central part of the canal and around the Great Bitter Lakes area, but with the northern, and particularly southern entrances with long stretches of a single channel.
The possibility is that Egypt will have to consider further expansion to the canal in order to cope with the increasing fleet of ultra-large vessels being built. Indeed, it might be suggested that the size of the canal is being determined by the increasing size of ships, rather than the other way around.
The does pose problems for Egypt as it has already invested considerable capital into the Suez Canal but up until 2020, it had not seen the expected scale of increase in shipping volumes and transit fees that it had expected. However, the Egyptian Government has been under pressure not just from the shipping sector but notably, from its neighbours in Saudi Arabia and the UAE to ensure the smooth running of the canal. The major change over the past thirty years is that the Suez Canal is now key to the economic prospects of the Arabian peninsular as well as Egypt. This makes it likely that the development of the canal will go beyond a bit of additional dredging.
Source: Transport Intelligence, May 18, 2021
Author: Thomas Cullen
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)