The unquestionable Suez Canal development project leaves many questions unanswered

Published August 17th, 2014 - 10:31 GMT
Former president Hosni Mubarak launched national projects, but they were not completed because of a lack of political will.
Former president Hosni Mubarak launched national projects, but they were not completed because of a lack of political will.

The government has begun taking measures to attract investments to fund the projects on both sides of the Suez Canal, according to Hassan Fahmy, head of the General Authority For Investment. President Abdel Fattah Al-Sisi launched excavation operations for a new Suez Canal last week ago, calling it a national development project. The project, Fahmy said, would underline Egypt’s seriousness in luring back foreign investment. “The project is diverse and promising, as it is expected to attract Arab and foreign capital as well as Egyptian investment in both the canal and its surrounding areas which are part of the development plan, whether Suez, Ismailia, or Port Said, in addition to the areas east of the canal,” he added. Investment expert Hany Tawfik, however, is concerned the canal project may share the same fate as the unfinished Toshka projects. “No one doubts the seriousness and enthusiasm of the current administration toward implementing the project,” said Tawfik. “Their actions have so far confirmed that this regime is different from previous ones, who made the people thirst for projects that were never implemented.” However, he questioned what appeared to be a lack of feasibility studies, engineering figures, and the management of investment, much of which he said remains a mystery. Former president Hosni Mubarak launched national projects, but they were not completed because of a lack of political will. This was the case with the Toshka, Wadi Gadid, and East Port Said projects, as well as with land reclamation of agricultural land. Tawfik does not see in the Suez Canal project a “new Toshka,” though he does believe financial and economic studies are necessary to ensure this. “I think that the current administration is dealing with the Suez Canal project hastily and without due care,” says Tawfik, but this is due largely to the absence of a parliament. Egyptians fear that the canal project will fare a similar fate as Toshka, he said, but “the ruling regime right now is serious and is going to implement the project, and the evidence of this is their quick movement to find funding sources and start digging” which the previous government did not do, he added. Prime Minister Ibrahim Mehleb said that he attended a meeting with President Al-Sisi on Thursday along with the ministers of Finance, Investment, and the Central Bank Governor Hisham Ramez, and they agreed to finance the canal project by offering investment certificates called “Suez Canal investment certificates” with a duration of five years and yearly yield of 12%, to be paid out every three months to all Egyptians. Ramez told Youm Al-Saba that “the meeting, which lasted five hours, went from 3pm to 8pm, during which the role of Egyptians banks was discussed, banks which will play a big role in funding the new Suez canal. A banking alliance will be formed that will include Egyptian public and private banks in order to grant the Suez Canal Authority loans to finance the digging of the new 35 kilometre canal, the building of new tunnels and infrastructure projects and roads”. “The canal development project is not new. It was proposed to the late President Sadat to begin from Zafarana in the south up to Port Said in the north to transform the canal into an industrial, commercial and tourism service area. It was also proposed to Former President Hosni Mubarak but there was no political will to implement it,” said Ali Al-Salmi, Former Deputy Prime Minister.

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