2920
Views

Despite Collapse in Traffic, Suez Canal is Planning a Two-Lane Future

Carrier transits Suez Canal
USN file image

Published Mar 4, 2024 10:10 PM by The Maritime Executive

 

Though traffic on the Suez Canal is down sharply this year, the Egyptian government is considering plans to extend the waterway's second channel and prepare for a future with more business than ever.

Suez Canal Authority chairman Osama Rabie has announced plans to turn the canal's last one-lane segments into two-lane thoroughfares, according to Bloomberg. If fully completed from one end to the other, a second channel could allow traffic to pass continuously, without the one-way convoy requirement that has defined the canal's navigation for generations. 

Funding for such a substantial expansion could be a challenge in the near term. In a good year, the Suez Canal brings in $9 billion or more in dollar-denominated revenue, but the disruption in the southern Red Sea has not been helping. 
According to Egyptian President Abdel Fattah El-Sisi, canal revenues are down by half compared to what they once were.

Rabie said that the expansion plan is still under consideration, and a final proposal has not yet been developed. 

The plan would expand on an ongoing construction program that was initiated after the grounding of the boxship Ever Given, which firmly wedged itself across a narrow stretch of the lower canal in 2021. The Suez Canal Authority is working on measures to improve navigability in the southern stretch, including widening one section and adding a 10-kilometer extension of a parallel channel. 

Any additional work would have to attract external financing or compete for resources with Egypt's debt repayment program. The government needs to come up with $29 billion to service its external debts in 2024, according to the nation's central bank, thanks to a large volume of principal repayments coming due.

Though the Red Sea disruption is affecting the canal's operations, Egypt has yet to criticize Yemen's Houthi rebels, who have been attacking shipping for months. Egypt has also stayed away from the counter-Houthi maritime security mission near the Strait of Bab el-Mandeb - even though Egypt has the largest navy in the Arab world.