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Friday, August 7, 2015, 17:09

Belt-Road initiatives to benefit from 'new' Suez Canal

By Sophie He in Cairo

Belt-Road initiatives to benefit from 'new' Suez Canal
The 72-kilometer "new" Suez Canal is officially open on Aug 6, 2015. (Provided to China Daily)

Egypt has inaugurated a "new" Suez Canal aimed at boosting the country's economy, while providing more investment opportunities for other countries, including China.

The new 72-kilometer (45-mile) waterway, built in less than a year at a cost of US$9 billion, runs parallel to the existing canal which connects the Red Sea with the Mediterranean.

The original canal, which opened in 1869, is one of the world's most important waterways. Currently, it handles about 7 percent of global sea-borne trade, and provides the shortest link between Asia and Europe.

According to The Suez Canal Authority (SCA), which operates the canal, the new waterway is expected to shorten the transit time from 18 hours to 11 hours for southbound convoys. It will also reduce the waiting time for vessels to a maximum of three hours from 8 to 11 hours.

Thus, shippers can expect to see shipment costs slashed, making the Suez Canal more attractive for ship owners.

The SCA forecasts that, by 2023, the number of ships using the canal will increase to 97 daily from the present 49.

The new waterway is expected to raise the Suez Canal's revenues from US$5.3 billion at present to US$13.226 billion by 2023 -- an increase equal to 259 percent that will positively contribute to Egypt's national income, the Authority said.

Egyptian President Abdel Fattah al-Sisi said at the opening ceremony of the new Suez Canal in Cairo on Thursday that the waterway is "Egypt's gift to the whole world" and it will be remembered by history.

The president also said Egypt will build more new projects, including an industrial and logistical hub alongside the canal, and the country welcomes all "international friends" to Egypt and invest in these projects.

Prior to the establishment of the extension, China has been among the top countries using the Suez Canal in terms of cargo tonnage, accounting for 6 percent of the total cargo transported from the southern part of the canal to the north last year, media reports said.

The new waterway will be crucial to China's "One Belt, One Road" initiative, Egyptian ambassador to China Magdy Amer told Xinhua news agency.

The ambassador said the canal enjoys a unique geographical advantage as it connects two oceans, and it will have an important role to play in China's 21st Century Maritime Silk Road project.

Proposed by Chinese President Xi Jinping in 2013, the Silk Road Economic Belt and the 21st-Century Maritime Silk Road are aimed at reviving the ancient trade route between Asia and Europe.

"This is a proud day, not only for the Suez Canal Authority and President al-Sisi, but also for the entire Egyptian population, which has strived to achieve the near-impossible in order to make this dream a reality," SCA Chairman Admiral Mohab Mameesh said at the opening ceremony.

The waterway project was mainly funded by Egyptians, with a national subscription launched by the Egyptian government which invited residents and nationals to invest in the canal to raise the necessary funds. A staggering US$8.5 billion was collected in just six days.

The Suez Canal is an artificial sea-level waterway running north to south across the Isthmus of Suez in Egypt linking the Mediterranean Sea and the Red Sea. The waterway separates the African continent from Asia, and provides the shortest maritime route between Europe and regions around the Indian and western Pacific oceans. It is one of the world's most heavily used shipping lanes.
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