Egyptians Race to Expand Suez Canal, Hoping for Trade Surge

Bulldozers push earth and dredgers spit mud round the clock at Egypt's Suez Canal in a race to quickly expand the strategic waterway for two-way traffic, a project trumpeted by President Abdel-Fattah el-Sissi to revive both the country's damaged economy and visions of nationalist glory.

The government's goal of more than doubling annual canal revenues to some $13 billion in less than a decade, however, appears overly ambitious. Although more vessels will be drawn to the canal because there will be almost no wait time, any major increase depends on something unlikely to happen soon, analysts and shippers say — a large jump in European demand fueling greater shipping from Asia.

"It all depends on the trade volume between East and West, not the capacity of the canal," said Xu Zhibin, managing director for the Egyptian affiliate of China's state-owned COSCO, one of the world's top container shippers. "Volume will rise if the European economy begins to boom ... As of now I don't think that there will be an increase in volume."

The expansion's importance is more long term, as it will better position the canal to keep its prominence in the future. In the short term, it appears to be more of a prestige exercise to boost national pride after four years of demoralizing turmoil and to shore up the image of President Abdel-Fattah el-Sissi as the savior of the nation. Egypt's economy has been battered since the 2011 uprising that ousted longtime autocrat Hosni Mubarak. His successor Mohammed Morsi, an elected but divisive Islamist, was overthrown by then-army chief el-Sissi during mass protests in 2013.

El-Sissi, who was elected president last spring, has risen on promises to stabilize the country and rebuild the economy. In a dramatic move after his election, he ordered that the Suez Canal expansion, envisaged as a three-year project, instead be completed in one year.

The military is directing the work, which involves digging a new waterway running for 35 kilometers (22 miles) parallel to the canal to end in the Red Sea, while deepening and expanding existing bypasses. Authorities say it is on track to open in August.

At the Suez Canal Authority's headquarters in Ismailia, films shown to journalists and potential investors lavish praise on el-Sissi with an almost Soviet-era extravagance. Men in the footage thank God for his arrival and elderly women call him "pure" and "good." In televised speeches in which el-Sissi has touted the canal, martial music plays over footage of special forces, tanks and fighter jets interspersed with shots of a vigilant el-Sissi directing officials and inspecting operations.

Bonds offered to fund the $8.5 billion military-led expansion were snapped up — mostly by individuals — in just over a week last autumn in a sale driven by nationalist fervor -- and a 12 percent interest rate.

The canal has long been tied to Egyptian national pride. Inaugurated in 1869, it connects the Mediterranean Sea to the Red Sea, giving maritime traffic between Europe and Asia a short cut to avoid the long trip around Africa. In 1956, then-President Gamal Abdel-Nasser nationalized the canal from the British and French companies that owned it, a moment cherished by Egyptians as a defiant break from imperialist control. Egypt fought three wars with Israel around the canal, in 1956, 1967 and 1973 — when Egypt launched a surprise attack across the canal that is now remembered as the country's greatest battlefield victory.