Egypt plans second tunnel under the Suez Canal
Egypt plans to build a second tunnel under the Suez Canal as profits from the canal continue to soar. The $1bn tunnel will be built just south of the northern entrance of the canal and is set to become the canal’s third crossing point after another tunnel and bridge. It will accommodate both cars and trains.
The news came after the Egyptian government announced continued growth in the canals traffic and overall revenue. The latest figures show a 10% jump in June, with $383mn in revenue from 1482 passing vessels.
“It’s a good source of 5 to 10% of the tax revenue,” Justin Alexander, an expert on Egypt with the Economist Intelligence Unit, told The Media Line. “The economy is not dependent on it (but) it’s one component of the economy.”
Abdel Fattah el Gibaly, Head of Economic Research Unit at the Al-Ahram centre for Political and Strategic studies in Cairo argued that while the canal remains important to the economy, its importance have decreased in later years.
“Its one of our main sources of foreign currency, especially American dollars,” he told The Media Line. “It’s very important and helps to raise our GDP (Gross Domestic Product), but it does not play the same role it used to. Now the economy is more focused on internal growth.”
The 120 mile canal is one of four major sources of foreign capital for Egypt as all ships pass through have to pay a fee. The country’s three other main sources of foreign capital are oil and gas export, tourism and remittances sent home from Egyptians working abroad.
The canal in its current form opened for traffic in November 1869 and has undergone several changes since. Earlier versions of the canal were used principally to transport military equipment, while the modern canal’s principal role is the improvement of world trade.
The Suez Canal Authority has been in charge of the canal since it was nationalised in 1956 by Egyptian president Gamal Abdul Nasser. The decision to nationalise came after the United States and Britain withdrew their support for the Aswan Dam project following Egypt’s recognition of China.
The series of events triggered the 1956 war in which Israel, under pressure from the US and UK to attack Egypt, occupied the Sinai Peninsula.
The Suez Canal became the border between the two countries until Egypt and Israel signed a peace agreement in 1979 and the Sinai Peninsula was retuned to Egypt.
another big infrastructure project in egypt..they must have a lot of money coming in..