02 March 2022; MEMO: Egypt has increased the transit fees for ships passing through the Suez Canal by ten per cent, reports the Associated Press, to develop and enhance the service.
Transit fees for liquefied petroleum gas and chemical tankers increased by ten per cent whilst vessels carrying vehicles, natural gas and general cargo went up seven per cent and oil crude tankers and dry bulk vessels will go up five per cent.
Authorities have been working on widening and deepening the canal after a huge container ship ran aground in the waterway in March last year disrupting global trade. The ship was impounded for three months whilst Egypt and the owners agreed to a compensation deal. Egypt estimated that it took a $14-15 million hit because of the blockage.
In February the Suez Canal Authority Chairman Osama Rabie announced that the two-way section of the canal would be extended from 71 kilometres to 82 kilometres, which would increase the capacity by six lanes.
Around 12 per cent of global trade passes through the Suez Canal carrying over $1 trillion worth of goods every year.
The expansion of the Suez Canal is one of the Egyptian government's vanity projects, along with building a new capital and expanding bridges.
These large-scale infrastructure projects have been a bid to attract support and extend the military's hold over the economy. In many cases, they have not helped the economy grow, despite lofty promises.
In 2014 the government announced that it was extending the Suez Canal at a cost of $8 billion with head of the Suez Canal Agency Muhab Mamish claiming that following the renovations revenues would reach $100 billion a year.
However, revenue fell from $5.5 billion in 2014 before the canal was extended, to $5.1 billion in 2015 after it was extended, nowhere near the projected amount.
The project was financed by the issuance of local bonds, yet the revenues did not return enough to repay the loan instalments.
In 2016 President Abdel Fattah Sisi said on TV that the goal of extending the canal was to lift morale in the country, not to make money.
