Egypt plans extension to make Suez Canal a ‘dual carriageway’

Reuters/Mohamed Abd El Ghany

• 80km canal extension planned
• Project needs president’s sign-off
• Revenues hit by Red Sea crisis

Egypt is to extend the “dual carriageway” segment of the Suez Canal, to allow northbound ships and southbound ships to travel the full length of the canal simultaneously.

The canal’s first double-channel stretch opened in 2015. This extension will add 50km in the north and 30km in the south, the chairman of the Suez Canal Authority, Osama Rabie, said on Sunday.

Speaking at the Marlog marine infrastructure conference in Alexandria, Rabie said feasibility studies had been completed and the project was awaiting presidential ratification.

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He did not reveal any costs or timeline for the 80km project. However, the 72km extension completed in 2015 cost between $8 billion and $9 billion, by most estimates.

A 10km extension of the double-channel section is due to be opened soon, increasing the traffic able to use the canal at one time by around six to eight ships.

Rabie also told the conference that revenues from the Suez Canal – a key source of foreign exchange to Egypt – had dropped by just over half during the first two months of 2024, compared to the same period last year. 

From the beginning of the year until 26 February, the country recorded only $724 million in transit fees, down from $1.47 billion at the start of 2023, after a spate of attacks on Red Sea shipping. Houthi rebels from Yemen began strikes on international craft last November, saying their actions were a protest against the Israel-Hamas war.

Shipping through the Red Sea has dropped by more than 80 percent by container volume, according to the Kiel Institute for the World Economy.

The Suez Canal Authority said that because of increased insurance and security costs, the price of a container traversing the canal has risen more than nine-fold, from around $750 per container before October 7 – when Hamas launched attacks on Israel – to $6,800 in 2024.

Rabie said he expects total revenues for 2024 to be around half of that of last year. The 2023 figure was $10.25 billion.

Egypt was suffering a foreign exchange crisis before the outbreak of war in Gaza, threatening tourism revenues and natural gas exports. The country was given a lifeline last month when Emirati sovereign wealth fund ADQ declared its intention to invest $35 billion in Egypt this year to develop Ras El Hekma on the north coast as well as “other prime projects in Egypt”.