The Suez Canal in the Balance: Prospects and Challenges Facing Ben-Gurion Canal
Pilot Lieutenant Hadi Gerges
the introduction
Maritime canals form the arteries of communication between the countries of the world, the most important of which is the Suez Canal. It connects the northern hemisphere to the southern hemisphere, shortening the distance from the Mediterranean Sea to the Red Sea and then to the Indian Ocean. It is therefore the only passage in the Middle East for ships of all types and sizes, becoming a global trade and re-export hub. Due to its unique geographical location, the Suez Canal is the shortest and best shipping route for global trade between the eastern and western hemispheres. Its strategic importance grows day by day with the development and growth of maritime transport and global trade. It allows the passage of most ships from Europe to Asia and vice versa. It is also considered a lifeline for Egyptians as it is one of the main sources of national income.
The grounding of the giant Panamanian container ship "Ever Given" captivated global public opinion while transiting the Suez Canal on March 23, 2021. Navigation in one of the world's most important maritime passages was halted for six consecutive days, disrupting global trade and delaying a large number of ships from reaching their destinations. This incident negatively impacted the global economy in general, triggering an oil crisis that contributed to a global oil price surge. It also led to significant financial losses for Egypt and the shipping companies involved in the incident.
This incident opened the pages of history and awakened the old and new dreams and plans of the Israeli enemy, particularly its ongoing pursuit, by all available means, to control the strategic waterways of the Middle East. The Israeli enemy did not hesitate to demonstrate its goals of control and domination, particularly over maritime navigation in light of the recent discoveries of gas and oil in the region. A project was proposed to dig a canal linking the Mediterranean and the Red Seas, dubbed the Ben-Gurion Canal Project.
Department the first
The Suez Canal: Egypt's Geographical Treasure
Historically, no project has impacted international relations as much as the construction of the Suez Canal. It is difficult to imagine any human achievement that could have altered the status of natural borders more dramatically. With a simple geographic surgical operation, the entire continent of Africa was reduced to a single metre. Due to its unique geographical location, the canal has become one of the most important canals and straits in the world. Its vital importance lies in its status as the most important trade artery linking the eastern and western hemispheres, and in its position as the shortest shipping route, reducing the distance traveled by ships crossing from the Red Sea to the Mediterranean and on to the Atlantic Ocean compared to using the Cape of Good Hope route around Africa.
From the perspective of public international law, the Suez Canal is an integral part of Egyptian national waters because it lies entirely within Egyptian territory. Its location at the center of five oceans and continents has significantly impacted global trade, making it one of its most important arteries. It has also been vulnerable to conflicts and wars throughout history. The importance of the Suez Canal is not limited to Egypt alone, although it generates the largest share of revenues, amounting to approximately $8 billion annually. All countries benefit from the canal.
First: The economic importance of the Suez Canal
Most of the world's economic production centers are currently located in the Far East, while transit and consumption centers are distributed across the Middle East, Europe, and America. Therefore, the Suez Canal is the largest link between production centers and consumption centers globally. Here, its economic importance is highlighted by its savings in waterway shipping costs, in terms of fuel consumption and ship operating costs.
The canal handles between 8 and 121 million tonnes of global seaborne trade, 351 million tonnes of trade arriving and departing from Red Sea and Arabian Gulf ports, 201 million tonnes of trade to and from Indian and South Asian ports, and 391 million tonnes of trade to and from the Far East. It's worth noting that revenues generated by the Suez Canal increase based on the quantity and quality of the cargo passing through, rather than the number of vessels transiting.
Law No. 30 of 1975 regulates the Suez Canal Authority, defining its exclusive jurisdiction to issue navigation regulations that determine the method of calculating tolls. Payment is accepted in a number of currencies, selected by the toll payer. Currently, there are nine (US dollars, euros, British pounds, Japanese yen, Canadian dollars, Swedish krona, Danish krone, Norwegian krone, and Swiss francs). Egyptian vessels identified by their Egyptian flag and owned by an Egyptian are also permitted to pay in Egyptian pounds. Thus, the Suez Canal is one of Egypt's top five sustainable sources of hard currency income, with annual revenues reaching approximately $8 billion in 2018. It can be confirmed that the canal is one of the most important sectors helping Egypt achieve its development ambitions and confront its economic crises, due to its stable revenues compared to those from tourism, travel, foreign investment, and other sectors vulnerable to the rapid impact of global crises, such as the COVID-19 pandemic, which has severely disrupted the global economy.
The renovated Suez Canal is expected to increase revenues by 2591% in 2025, reaching $13 billion, compared to the previous $8 billion. This will have a direct and positive impact on Egypt's national income in hard currency. The Suez Canal marked a new milestone for the Egyptian economy. Initially built as a purely maritime corridor, the Canal has over the years transformed into a premier Egyptian economic development corridor, contributing billions of dollars annually to Egypt's national income. It is believed that increased interest in and project development there will have a positive impact in the coming years, potentially reaching $30 billion annually, through integrated local activities.
Suez Canal Company reports indicate that between 1,200 and 1,500, and sometimes even 1,800, ships transit the canal monthly. This demonstrates the canal's significant role in global trade, particularly for oil tankers heading from the Arabian Gulf and South Asia to Europe or the Americas. It reduces the journey of these ships by thousands of kilometers and dozens of days, saving companies and consumers worldwide millions of dollars. For every day that traffic through the Suez Canal is halted, Egypt incurs losses exceeding $15 million, distributed among ship transit fees, the cost of halting ship and operator maintenance, and other activities associated with this waterway, which contribute to the revitalization of Egyptian cities adjacent to the canal. A recent American study confirmed that the Suez Canal represents the most important maritime route for global trade, which gives it the potential to influence the well-being of countries and societies in the event of any changes or crises that impact transit through it. It also described it as the most important node in the global trade network.
Second: The Ever Given ship grounding incident
On March 23, 2021, maritime traffic through the Suez Canal was halted when the container ship Ever Given ran aground while transiting the canal en route from China to Rotterdam, Netherlands. The ship became wedged between the two sides, blocking the canal and halting maritime traffic. The incident stranded approximately 150 ships, while at least 15 others were grounded.
The ship, a Gold Class container ship, is 400 meters long, has a draft of 15.4 meters, and has a capacity of approximately 200,000 tons. It is one of the largest vessels in the world. It belongs to a Taiwanese company and was commissioned in Panama. Its owner is Japanese. The Suez Canal Authority explained that the accident was caused by poor visibility and strong winds. The area was experiencing a sandstorm and strong winds, coinciding with the passage of a Khamaseen depression over the country. This exacerbated the situation and reduced horizontal visibility. A crisis management committee was formed to refloat the ship, which took six days.
Several parties exploited the grounding of the giant container ship "Ever Given" and its disruption of shipping traffic through the Suez Canal, sparking talk of a waterway for global trade. Some countries even promoted their maritime projects as an alternative to this canal, which is the most important waterway for the global economy. However, despite the short period it took for the canal authority to reopen and operate the region's most important waterway and restore navigation, the incident had a profound impact on the global economy in general and the Egyptian economy in particular, across all levels. Some sectors experienced significant disruption and prices rose randomly. We will discuss some of the details below:
1. Disruption of global navigation
The closure of the canal resulted in approximately 321 ships waiting at the northern and southern entrances to the canal, resulting in a backlog of ship traffic between the east and the west, especially on the three routes: Shanghai-Rotterdam, Singapore-Rotterdam, and Ras Tanura-New York, which are primarily served by the Suez Canal and have no alternative at a comparable cost. 5
2. Rising prices of basic commodities
The Ever Given ship grounding has contributed to a rise in energy and food prices, due to reduced supply due to the inability of goods to reach their destinations on time. On the other hand, demand for all commodities has increased as a result of measures to curb the spread of the COVID-19 pandemic and the reopening of economies in most countries, leading to a rise in the prices of all basic commodities.
3. High container prices
Global container rates have seen a rise, with charter costs reaching approximately 3,001 TP3T over the course of a single year on east-west routes. The canal's closure has led to a significant number of containers being stuck on both sides of the canal, thus increasing container prices. After Egyptian authorities reached an agreement with the ship's Japanese owner to compensate for the damages, the captain of the giant container ship "Ever Given" raised the anchor and the vessel left the canal after being held for more than 100 days. During an interview with the head of the Suez Canal Authority, Osama Rabie, he said, "Egypt will receive financial compensation from the Japanese company that owns the ship, in addition to a tugboat with a pulling force of 75 tons." Rabie continued, "We have preserved our rights and maintained good relations with our customers."6
Third: An alternative to the Suez Canal
Finding an alternative to the Suez Canal has been a long-standing idea, given its strategic importance and its status as the most important maritime artery for the global economy. Furthermore, the Ever Given crisis, which disrupted navigation in the canal, has revived international efforts to find an alternative route. Japanese shipping companies have also begun exploring routes connecting East Asia to European markets without passing through the canal. The incident has also drawn attention to Libya's logistical importance. In this context, the head of the Turkish-Libyan Business Council explained that Turkey will begin expanding its economic activities in Africa via land routes, through an economic, logistics, and trade center that Turkey seeks to establish in Libya. He emphasized that this center will reduce the time it takes for goods to reach inland countries in Africa from 45 days via the Suez Canal to between 10 and 15 days, which would represent significant savings in transportation costs. 7
One possible approach proposed in a memorandum submitted by the Lawrence Livermore National Laboratory, which is supported by the US Department of Energy, is to dig a canal through Israel's Negev Desert, linking the Mediterranean Sea to Jordan's Gulf of Aqaba and opening a gateway to the Red Sea and the Indian Ocean. The memorandum also identified 130 miles of desert wasteland as amenable to nuclear drilling. The laboratory anticipated that opposition from the Arab states surrounding Israel would pose a challenge to the plan's implementation.
Another alternative is the Iranian corridor, the most important trade link between Asia and Europe. Countries along this corridor are developing their ports, roads, and railways to participate and access it. However, despite its short length and low cost, this corridor cannot compete with the Suez Canal because it relies on sea and land routes. Land transport via rail cannot cover the cargo capacity of a single cargo ship. Moreover, international trade is not limited to operations between Asia and Europe.
Department the second
The establishment of the Ben-Gurion Canal and the advantages it will enjoy
The idea of creating an alternative canal to undermine the Egyptian Suez Canal project dates back to the time when the Sublime Porte granted the Frenchman Ferdinand de Lesseps the concession to dig the Suez Canal. The British then proposed the construction of a two-way canal on Palestinian soil as an alternative to the Egyptian Suez Canal.
In the 1950s, successive Israeli governments began developing plans to implement alternative projects to the Suez Canal, including the construction of a sea canal linking the Gulf of Aqaba, specifically from Eilat, with the Mediterranean Sea near the Gaza Strip. Subsequently, in 2013, Israeli newspapers reported Israel's intention to build a canal linking the Red Sea to the Mediterranean Sea, a rival to the Suez Canal. The new project, called the Ben Gurion Canal, would be the most important strategic and water-related project in the region.
The Israeli enemy wanted to build an alternative maritime canal to the Suez Canal, given its economic and commercial importance. The new canal would serve as an alternative to its strategic location. In this way, the enemy would secure its control over the Middle East.
And the expansion of its geographical areas in the future, abandoning cooperation between it and Egypt for the sake of its own interests, without caring about the huge losses it would cause to the Suez Canal and Egypt.
Digging the Ben-Gurion Canal would strangle the Suez Canal, given that the two canals are of similar length. Furthermore, this project would have enormous repercussions at all political and economic levels, and would constitute a blatant threat to Egypt's existence in light of the challenges facing its economy, the Nile River water crisis, and the Grand Ethiopian Renaissance Dam. The construction of the canal would grant Israel significant advantages, given its geographic location and global economic and commercial importance, which would prompt many countries to cooperate with it instead of the Egyptian canal.
First: Details of the Ben Gurion Canal construction plan
The Israeli enemy devised a meticulous plan to build the Ben Gurion Canal, starting with financing the project through low-interest American loans, while the annual profits from the canal would be extremely high. It also pressured several neighboring and regional countries to advance its own dubious interests, and even refused to sever ties with Egypt after the latter directly threatened it.
1. Location
Several Israeli engineers have explained that it is possible to build a canal linking the Red Sea and the Mediterranean, and that it could become a real competitor to the Suez Canal. The distance between Eilat via the Red Sea and the northeastern coast of the Mediterranean is not great, and it is very close to the distance ships travel through the Suez Canal to get from the Red Sea to the Mediterranean and vice versa. The experts indicated that the Israeli government should push for a canal project linking the Gulf of Aqaba via Eilat to the Mediterranean north of the Gaza Strip, or via it, in a manner consistent with Israeli interests, without constructive solutions to the Palestinian issue and efforts to displace Gazans from the aforementioned area.
2. Canal engineering
The Israeli enemy is promoting the idea of a two-lane canal, each at least 50 meters deep and 200 meters wide—10 meters deeper than the Suez Canal—that would allow ships up to 300 meters long and 110 meters wide to transit. It also claims that the terrain on which the canal will be built is rocky, meaning it will rarely require maintenance and can withstand significant pressure, unlike the Suez Canal, which is sandy and requires constant monitoring and surveillance.
According to the enemy's claims, the construction period will range between three and five years, and the project will employ approximately 300,000 workers, including engineers and technicians in all fields, most of whom will come from Asian and African countries, as well as from Arab countries such as Egypt and Jordan, to build the canal. A number of them will remain to ensure its sustainability. As for the canal's security, this aspect will be given utmost importance by Israeli officials, who claim that they will install spy devices deep within the canal, in addition to surveillance devices along its length. Advanced barriers and searchlights will be built to detect weapons and provide laser images of every ship crossing the canal. 10
3. Side benefit
Israel plans to establish several new cities along the Ben Gurion Canal, an alternative to the Suez Canal. These cities will resemble small towns with old houses, in addition to hotels, restaurants, shopping malls, resorts, and nightclubs spread out over large areas around the proposed canal. This will be popular among countries seeking to attract investment and secure international approvals. This has already been expressed by including it in the terms of the "Deal of the Century," since the Eilat area and its surroundings, along with the entire territory toward the Mediterranean Sea, are semi-desert.
Israel is seeking to persuade Jordan to accept a project to channel water from this canal to the Dead Sea, which suffers from annual water shortages due to the region's internal water scarcity. If Jordan agrees, a massive pipeline will be built from the planned Israeli canal to the Dead Sea to raise the latter's water level, in exchange for facilitating the construction of hotels and resorts on the Dead Sea. Israel would also help promote tourism to the Petra region, thus boosting the Jordanian economy, which has been experiencing some difficulties recently.
4. Financing
The cost of building the canal could range from $16 billion to $55 billion, according to studies. The Israeli government believes its annual revenue will reach approximately $4 billion or more. It will also agree with several American banks to lend it the required amount at low interest rates. Thus, the canal will be built using funds borrowed from American banks at very low interest rates, without disbursing any of its own budget, while benefiting from the full revenue.
Second: Gaza and the establishment of the Ben Gurion Canal
In late September 2023, just a few days before Operation Protective Edge, Israeli Prime Minister Benjamin Netanyahu delivered a speech at the UN General Assembly, discussing the consequences and developments of the normalization process with some Arab countries and the implications for the changing landscape of the Middle East. During his speech, he displayed a map of areas colored in a single color, including Arab countries that have peace and normalization agreements with Israel, or are in advanced negotiations to normalize relations with it. These countries include Egypt, Sudan, the UAE, Saudi Arabia, Bahrain, and Jordan. By contrast, there is no Palestinian state, as Israel has assigned a single color to the map, covering the 1948 territories, the West Bank, and the entire Gaza Strip, effectively erasing any trace of Palestinians. Following Operation Protective Edge on October 7, 2023, Benjamin Netanyahu announced that Israel's response to Hamas would change the shape of the Middle East and the region for decades.
Plans for a Greater or Expanded Middle East are not new. They began in the 1990s with successive US administrations, but never saw the light of day. However, the Al-Aqsa Intifada revived them and gave them a major impetus for their realization and implementation, a move that Israeli Prime Minister Benjamin Netanyahu announced during the 78th session of the General Assembly.
The United States realized that cooperation on this project would help it contain the BRICS group and counter the Chinese-led Silk Road project. It would also enable it to build a competing axis, thus limiting the influence of China and its allies in the region and beyond.
The Ben-Gurion Canal project is based on the valley adjacent to the Gaza Strip, which extends from Mount Shajarat, near the Sde Boker settlement, to the Zahra area in the northern Gaza Strip. Its width ranges from 40 meters at its narrowest point to 400 meters on the western coast of the Strip. The valley divides the Gaza Strip geographically into two parts: northern and southern.
During the recent Israeli aggression on Gaza, more than two-thirds of the approximately 1.1 million Palestinian residents of northern Gaza were displaced to the south, where the required evacuation was being carried out. Israel is practicing genocide and erasing all forms of life in the north, so that none of the displaced will return. The valley will be dredged and widened to become a navigation channel to accommodate maritime traffic and allow the passage of large ships. Modern technology and heavy machinery will be used to implement this massive project. 12
In light of this, many questions have been raised about the undeclared aspect of the aggression on the Gaza Strip, especially after it became clear that the Al-Aqsa Intifada accelerated major events that were about to take place in the Middle East, linked to global geo-economic conflicts. Chief among these was the final liquidation of the Palestinian cause, particularly in the Gaza Strip. This was intended to pave the way for the construction of the Ben-Gurion Canal, which would replace the Egyptian Suez Canal. This would mean a crushing blow to Egyptian national security, and the loss of Egypt's last remaining card that gave it a presence on the international stage.
On January 15, 2025, a ceasefire agreement was announced in Gaza, coming one year and three months after the start of the Israeli aggression on the Strip, which resulted in the deaths of more than 46,000 Palestinians, most of whom were children, women, and the elderly. Despite statements by former US President Joe Biden that Palestinians would be able to return to their homes, there are concerns about the terms of the agreement, which may stipulate the creation of a buffer zone preventing Palestinians from accessing certain areas, particularly the northern ones. This move was followed, in a controversial move, by the US administration with a proposal announced by US President Donald Trump to transform the Gaza Strip into the Riviera of the Middle East after displacing its Palestinian residents to other countries. This has been described as a recycling of forced displacement projects that Israel has sought to implement for decades in preparation for the implementation of its plans in the region, including the Ben-Gurion Canal. Trump's statements came during his meeting with Israeli Prime Minister Benjamin Netanyahu in Washington, where he clearly stated: "We want to control Gaza after displacing its residents, and there are countries other than Egypt and Jordan that can accept them." In contrast, on the 22nd day of the ceasefire agreement in Gaza, after the Israeli army radio confirmed the complete withdrawal of its forces from the Netzarim axis in accordance with the arrangements for the first phase of the agreement, Egypt announced that it would host an emergency Arab summit on February 27, 2025, to discuss the new and dangerous developments in the Palestinian issue following the US president's statements. The Saudi ambassador to Britain, Prince Khalid bin Bandar, also stated that the Kingdom rejects normalization with the Israeli enemy without a resolution to the Palestinian issue, reflecting the cohesion of the Arab position thus far in the face of US pressure.
Third: The privileges that the canal will provide to the Israeli enemy.
One of the most important advantages Israel will gain from the construction of the Ben-Gurion Canal is the expansion of its influence in the Mediterranean and Red Seas, which will help it dominate the surrounding regions in the future. This will also allow it to share Egypt's share of global trade, not to mention the transfer of weapons and military equipment through its own canal without foreign interference. Israel is striving to control and expand its influence in order to reach the gateways of the Mediterranean sea routes. Israeli efforts were clearly evident in the Abraham Accords for normalization with Morocco, the UAE, and Sudan, with careful and organized planning based on economic interests. Thus, Israel will be able to control numerous maritime facilities, from the Sea of Oman, the Arabian Gulf, and the Strait of Gibraltar, all the way to the Red Sea via the Ben-Gurion Canal.
The Ben-Gurion Canal project aims to create new trade corridors, not passing through Syria and Lebanon, but rather through other Arab countries, extending from the Arabian Gulf in the south to the Mediterranean Sea in the north. Many oil and gas pipelines coming from Iraq will pass through it. This will deprive Lebanon and Syria of their historical and strategic geographic importance as the most important linking points in global trade between North and South. However, what has hindered this project at this stage is the presence of the Israeli enemy as a key partner in the plan, a matter currently opposed by the Iraqi government.
Fourth: Difficulties in establishing the Ben-Gurion Canal
Digging the Ben Gurion Canal is no easy feat. Otherwise, it would have been dug since the idea of constructing it first emerged in 1963. However, there are difficulties and obstacles facing this project, which is considered one of the old dreams of the Israeli enemy, and work on it has been re-proposed with new arguments and motives. How likely is it that the enemy will succeed in establishing its alternative canal at the expense of the Suez Canal? And what are these difficulties?
The proposed canal route is a very wide valley, but this route rises as one moves north. In some areas, such as the Risha Mountains, it may reach more than 400 meters above sea level. This would entail enormous costs due to the need to dig a canal to a great depth in the solid rock. Furthermore, the canal, which would replace the Suez Canal, would pass through the Jordan Valley, which is lower than sea level, causing the submergence of large areas of land on both the Jordanian and Palestinian sides, thus impacting tourism, industrial, and agricultural activity in the Dead Sea and Jordan Valley regions. 13 If the canal is dug in this direction, it will be necessary to modify the route of the Ben Gurion Canal from a straight line to a curved one after Lake Brega. This modification would be in the northwest, as the canal's continued curved path could pass through Lebanese territory. Digging the canal in this direction would make it approximately 600 km long, which would be several times the length of the Suez Canal, which is 193 km.
The proposal to dig the canal with nuclear bombs, since it is less expensive than traditional excavation, would have negative health and environmental consequences for the region, causing the destruction of surrounding residential and agricultural areas. The implementation of the railway project accompanying the Ben Gurion Canal project faces some challenges. For example, the grounded ship Ever Given was carrying approximately 20,000 containers, and containers typically range between 6 and 12 meters in length. Therefore, the project would require a train over 100 kilometers long to accommodate the Ever Given's cargo. Assuming that a container takes five minutes to unload from the ship onto a train, it would take more than two months to transport and unload it to and from the train. Therefore, the railway project is unfeasible.
From this, it becomes clear that it will be difficult to realize the Israeli dream of creating an alternative to the Suez Canal via the Eilat train. There is no economic or commercial feasibility for a train designed to unload one ship per week. Furthermore, a ship containing eight thousand containers would require 50-kilometer-long locomotives, which would make loading and unloading difficult. This is the minimum number of containers for a giant ship.
Some ships carry 12,000 containers, and the Israeli overland line project will only carry about 50 containers per day. This number pales in comparison to the daily tonnage of ships passing through the Suez Canal, which is transited by at least 18,000 to 20,000 giant vessels per year. This equates to about 1,500 ships per month, at a rate of 50 ships per day. After the canal's development, this number is expected to double. As for the claim that the Eilat train will save time and money, overland shipping a ship's cargo through Eilat could take 21 days, and the cost of unloading and loading a single container would reach $1,000. Meanwhile, through the Suez Canal, a ship's transit takes less than 14 hours, and the cost of a single container does not exceed $30. Moreover, the Israeli enemy wants to transform the train into a trade and passenger train, which will further increase the cost.
Despite the difficulties facing the construction of the Ben-Gurion Canal, the Israeli enemy poses a significant threat to the Suez Canal and the Egyptian economy in particular. Not only that, but the enemy's involvement in the region through numerous investments and projects constitutes a breach of Arab and regional security alike.
Department the third
The repercussions of digging the Ben-Gurion Canal on the Suez Canal and ways to confront them
The construction of the Ben-Gurion Canal would diminish the importance of the Suez Canal and its leading commercial role. The distance between the two canals is only the width of the Sinai Peninsula, given that the distance between the city of Eilat and the Mediterranean Sea is roughly equal to the length of the Suez Canal. However, Israel would reduce the transit time for ships through its canal compared to the time they use to cross the Suez Canal to and from the Mediterranean, which would intensify competition with Egypt.
The establishment of an Israeli canal as an alternative to the Suez Canal, linking the Mediterranean and Red Seas, and thus transforming it into the world's premier economic maritime artery, will generate enormous profits and leverage for the Israeli enemy. It will also threaten the Suez Canal's position and cause enormous damage to the Egyptian economy, which relies heavily on the canal's annual financial revenues.
With the construction of the Ben-Gurion Canal, Egypt will lose the major strategic importance it has gained thanks to the Suez Canal since its opening. This status could be transferred to the alternative canal, given Egypt's distinguished and influential role regionally and internationally. Furthermore, Egypt may lose the confidence of the maritime and shipping community, posing a threat to its economy. Furthermore, with the Ben-Gurion Canal, the number of modern ships received by the Suez Canal will significantly decrease, as it is the fastest and shortest passage. Consequently, Egypt will lose most of the fees paid by ships transiting the canal, which is the most important source of foreign currency for Egypt's national income. 15
Amid all these threats, Egypt has begun developing a future national plan to improve the Suez Canal and increase its productivity. This will help avoid competition with the Israeli canal and prevent future incidents such as the Ever Given incident. This will ensure the Suez Canal region is economically and urbanally integrated, environmentally balanced, and a distinguished global center for maritime, logistical, industrial, and tourism services.
First: The Suez Canal expansion project
There is no doubt that this giant project is a dream project for Egypt and the Egyptians. It aims to enhance the role of the entire Suez Canal region, making it the world's most important logistics and industrial center, integrated across all economic, urban, and environmental levels. It will propel the Egyptian economy toward recovery. It aims to increase national income, inject hard currency, and provide nearly two million job opportunities for Egyptian youth by constructing industrial cities along the canal's banks, including ship maintenance and repair facilities, ship fueling stations, and service facilities such as schools, commercial and tourist centers, and more.
The New Suez Canal project aims to double its revenues by increasing the canal's vessel capacity, from 49 ships currently to 97 per day by 2025. It also aims to develop navigation in the canal using modern equipment and tools that ensure safety and speed in navigation operations.
Most experts expect the Suez Canal expansion project to increase revenues from approximately $8 billion per year to $13 billion by 2030. Revenues will increase further following the completion of expansion-related projects, which include significant development of all areas surrounding the Suez Canal region. The expansion project is also expected to attract additional international shipping lines to Egypt, increasing the canal's capacity to approximately 501 TP3T vessels. It will also allow large container ships and supertankers, which are not suitable for the current depths of the Suez Canal, to pass through it, having previously used the Cape of Good Hope route to reach their unloading areas.
The Suez Canal project was financed through loan certificates issued by public banks on behalf of the Suez Canal Authority. Repayment terms are five years, with annual returns of up to 121 TP3T paid by the Authority. The loans are guaranteed by the Ministry of Finance and are available in denominations of EGP 10, EGP 100, EGP 1,000 and multiples thereof (for example, one certificate/share can be purchased for EGP 5 million). These certificates are exempt from all taxes and are non-negotiable. Returns on the certificates are disbursed in cash amounts of EGP 1,000 and multiples thereof, after three months, on a recurring basis. Payments begin the day following the purchase of the certificate, and accrue at the end of the term for certificates of EGP 10 and EGP 100. The recurring returns can be disbursed directly through the bank, via ATM card, or by transferring it to the customer's account if the customer is a bank customer. 16
The Russia-Ukraine conflict and Russia's ongoing threats regarding Russian gas supplies to European markets will push the continent's countries to wean themselves off their dependence on Russian gas and reconsider their gas import sources, which will naturally come from the Middle East. The Suez Canal will certainly benefit from this shift, as LNG tankers transit through it toward Europe. Qatari gas exports are expected to play a significant role in meeting the needs of European markets. Qatar currently exports LNG to the United Kingdom and Italy, and it also has additional production capacity allocated to the American market. However, this market is beginning to become saturated, and its need for imported gas has decreased, following the advent of shale gas production worldwide. There is also the potential for future LNG exports from East African countries, where massive offshore gas discoveries have been made, as well as from the United Arab Emirates, Oman, and Yemen. However, these supplies are currently mostly directed to Eastern countries, particularly Asian markets, which are experiencing rapid development and a significant increase in demand for gas annually.
Although European demand for Middle Eastern gas is likely to increase, a dispute over transit fees for LNG tankers has emerged between Qatari gas companies and the Suez Canal Authority in recent years, leading to a decline in trade through this pipeline. This dispute is expected to continue for the foreseeable future.17
Second: Developing the Suez Canal region
The plan generally includes 42 priority projects, including 6 projects of utmost importance, namely:
- Improving the main public roads (Cairo - Suez - Ismailia - Port Said) and converting them into freeways that ensure ease of work, transportation and movement between the various parts of the Suez region from south to north and also linking it to the capital, and constructing the Ismailia Tunnel passing through the Suez Axis to connect the two banks of the canal, east and west.
- Establishing a tunnel under the canal south of Port Said to easily connect and communicate between the eastern and western sectors of the Suez Canal region, in addition to making Nuweiba Port a free zone, developing Sharm El-Sheikh Airport, and creating a new water intake in the Ismailia Canal area up to the site of the purification plant east of the canal to support new development areas.
– Establishing tourist villages and resorts in Sharm El-Sheikh, Nuweiba, and Taba, constructing a petrochemical industrial complex in the industrial zone in Al-Masaid and another in the industrial zone northwest of the Gulf of Suez, petrochemical factories in the industrial zone northwest of Suez, a food industries complex in the Sheikh Zuweid area, in addition to another industrial complex for marine products in the industrial zone in Suez and another one east of Port Said. A mechanical and electrical industries complex will also be established in the industrial zone northwest of Suez, another in the industrial zone east of Port Said, and a complex for mining and building materials industries in North Sinai, and another in the industrial zone in Abu Redis.
- Establishing an industrial complex for shipbuilding and repair in the industrial zone east of Port Said, and an industrial complex for spinning and weaving in the same zone, and another in Sharqia, in addition to a fertilizer industries complex in the industrial zone in Sharqia, and factories for solar water heaters in Central Sinai. The remaining projects of the priority development plan are: establishing several national projects along the Holy Family Road that will integrate with each other, building a technological university in the Technology Valley area in Ismailia, establishing a hotel school between Arish and Sheikh Zuweid, and establishing a city for medicine and science in cooperation with international universities in Central Sinai.
- Establishing a 2,500-megawatt solar power plant, reclaiming 400 acres in North Sinai via the Al-Salam Canal, a 50,000-acre floodplain reclamation project in the Al-Brook Valleys, and a 1.659 million-acre reclamation project in the Wadi Al-Arish Plain. The expected investments, infrastructure, and construction for the development of the Suez Canal region are enormous, costing approximately $100 billion by 2030.
The Suez Canal Axis development project will begin in three main centers18, the first of which is Port Said City Center with the East Port Said area, the second is the development of Ismailia Center and the Hope District with the Technology Valley and New Ismailia, and the third is the development of Sokhna Port and Airport with the northwest Gulf of Suez, with details as follows:
– First place The plan includes transforming its pivotal areas into global logistics service zones, through the development of Port Said and the East Port Said area, covering an area of 70,000 acres, along with the construction of a new tunnel under the canal. The plan also includes identifying areas for agricultural reclamation, in addition to establishing fish farms, industrial zones, and implementing tourism and marine activities.
– Second place The development plan includes the development of Ismailia, New Ismailia, and the Al Amal suburb west of the Canal, along with the Technology Valley, covering an area of 66,000 acres. This is in addition to the construction of a new tunnel running under the Canal. The plan also includes the establishment of a special logistics zone for this area, which will include all import and export operations, as well as manufacturing and distribution. This will include warehouses, container shipping, and manufacturing. In parallel, work will be done to establish an integrated industrial zone, a technological university, and the implementation of tourism and medical activities.
– Third place The Suez Canal Corridor development project involves developing the 46,000-acre West Gulf of Suez region. This includes the establishment of a logistics zone encompassing a naval arsenal and shipbuilding, container handling, transit trade, repair and maintenance services, shipping and technical inspection. It also includes the establishment of industrial sites for petrochemicals, ship supply and marine services projects, the manufacture of marine equipment and metal structures, the manufacture and packaging of feed and fish, and the packaging and export of chemical fertilizers and cement. The development of this zone also includes tourism activities through tourist and hotel housing, entertainment areas, restaurants, theaters and cinemas, and international sporting activities. It also includes marine activities through the establishment of a center for marine research and studies, the manufacture of boats and yachts, the construction of floating units, the marketing of marine products, and the manufacturing of aluminum products.
Conclusion
Egypt boasts numerous economic and commercial assets, the most important of which is its strategic geographic location. It is a prominent investment magnet, located close to global European and Middle Eastern markets. Furthermore, it is home to the most important shipping lane, the Suez Canal, which is the fastest and most efficient link between East and West, significantly contributing to attracting all types of investments. A new war is looming on the horizon, this time an economic one aimed at controlling seaports and commercial shipping lanes worldwide. This is all due to American fears of the rising economic power of China, which is pursuing its New Silk Road project. This project aims to connect China's western provinces with the countries of West Asia via a global shipping line, a multi-billion dollar investment. Therefore, the United States is seeking to create a route for the exchange of goods that competes with the Chinese maritime route.
The Ben-Gurion Canal is merely the initial phase of a project that will not be implemented until another canal is dug, connecting the Mediterranean to the Dead Sea. This will make Israel a pivotal state in the world, possessing a maritime shipping lane that rivals and threatens the Suez Canal. The project also represents a radical change in the region's geographic environment, meaning Israel could permanently control the West Bank. There are also possibilities for settling a number of Palestinian refugees in neighboring countries. In the twenty-first century, a development in relations between Israel and certain countries has emerged as a remarkable new dynamic in the Middle East. This raises a question about the Arab states' strategy for securing their wealth, interests, and waterways in the region.
It is a crucial decision time for Egypt to embark on developing the canal and confront the challenges, and a time to work on optimally exploiting Egypt's geographical location to keep pace with the growing global demand for maritime trade. Accelerating the Hope Project to expand and deepen the Suez Canal is a vital issue for Egypt and a matter of national security not only for it but for all Arab countries. The most important question that arises is: Will Egypt succeed in this fateful battle? Will it be able to confront the Ben-Gurion Canal Project or any other project competing with the Suez Canal?
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Quoted from: Lebanese Army Magazine
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