Egypt Completes EGP 9 Billion Suez Canal Development Project

Egypt has completed a major EGP 9 billion (USD 178 million) development project in the southern sector of the Suez Canal, aimed at enhancing its navigational capacity and global competitiveness, Suez Canal Authority (SCA) Chairman Osama Rabie announced Monday 10 February.

The two-and-a-half-year project involved expanding the canal by 40 meters to the east and deepening it to a depth of 72 feet, which is expected to boost maritime traffic efficiency by 28 percent. 

The expansion also included duplicating a 10-kilometer section, allowing for smoother and safer navigation for larger vessels.

Despite challenges posed by global shipping disruptions and declining revenues, the project proceeded under directives from President Abdel-Fattah El-Sisi. 

Rabie emphasized that the development was carried out entirely using Egyptian labor and locally manufactured dredgers, with all funding in Egyptian pounds to minimize reliance on foreign currency.

The completion of the project comes as Egypt faces mounting challenges in the Red Sea, where ongoing security concerns have significantly impacted global trade through the Suez Canal. 

The Suez Canal remains one of Egypt’s most critical sources of foreign currency, but ongoing regional instability has significantly affected its revenues. 

As of the first half of the 2022/2023 fiscal year, the Suez Canal contributed approximately 2 percent to Egypt’s GDP. In the fiscal year 2022/2023, the canal’s revenues reached a record USD 8.8 billion (EGP 446 billion), accounting for 15 percent of Egypt’s main foreign currency inflows

In September 2024,President Abdel Fattah Al-Sisi stated that canal earnings have dropped by 50-60 percent this year, amounting to losses of approximately USD 6 billion (EGP 289.85 billion).

The decline is largely attributed to disruptions caused by Houthi attacks on vessels in the Red Sea, as well as heightened tensions following Israel’s war on Gaza and its recent strikes on Lebanon. 

The conflict has led several shipping companies to reroute vessels via the Cape of Good Hope, bypassing the canal.