Despite the huge revenues garnered by the Suez Canal—more than $5 billion in 2011, according to the Suez Canal Authority, SCA—the surrounding communities have seen little of the profits.

Unlike other countries, which have turned their waterways into development drivers, Egypt only collects tolls from passing ships and transfers them to the treasury.

Despite the huge revenues garnered by the Suez Canal—more than $5 billion in 2011, according to the Suez Canal Authority, SCA—the surrounding communities have seen little of the profits.

Unlike other countries, which have turned their waterways into development drivers, Egypt only collects tolls from passing ships and transfers them to the treasury.

“Egyptian officials can’t even think of any projects on the banks,” said Um Alaa, a cafeteria owner on Sarabium ferryboat. “The Egyptians themselves can’t go there when military ships pass through to the Gulf. My cafeteria used to receive hundreds of guests but now it is empty, save a few people.”

Abu Haitham, a fisherman claimed that getting a fishing license for a small boat was more difficult than constructing huge factories.

“What the consecutive governments do aims at destroying Sinai instead of developing it, by installing endless security checkpoints and obstructing the arrival of basic services to the canal’s eastern bank,” said Abdul Hadi Marzouq, a garden trader who claimed that this has forced thousands of families to leave the canal villages and go back to the Delta. “Any talk about establishing projects on the banks is a far-fetched idea under the current regime,” he added.

According to Global Finance reports other countries have raised their per capita income with water development projects. Singapore, for example, has managed to raise its per capita income from $800 to $64,000 within ten years, the highest among non-oil countries, compared to $45,000 in the United States, $20,000 in Turkey and only $1,200 in Egypt.

All eyes on Singapore

Singapore, with an area of only one ninth of Sinai—consisting of one main island and several tiny ones—was ignored due to a lack of resources, until the country’s administration recognized the huge possibilities, riches and advantages of its geographical location.  It is an island with 180 kilometres of coasts, almost as long as the eastern bank of the Suez Canal or Sinai coast on the Mediterranean, according to Mahmoud Amara, an economic development expert.

Amara pointed out that Singapore started its development project by turning its 180-km coast into an international port with different services: freight, supply, ship repair, stevedoring and land and railway transportation.

Due to its success in attracting most of the passing ships, as a result of its high service provision performance, Singapore gains $21 billion annually from services alone.

Egypt, on the other hand, does not provide any services and collects a mere $5 billion annually in tolls, according to SCA, even though the Suez Canal location is more important than that of Singapore.

Egyptian experts have developed an integrated project that would raise the canal’s annual revenues to $12 billion from services to as high as $100 billion if investments are expanded, as stated in the project.

Wa’el Qaddour, SCA former planning director and member of the Toll Assessment Committee, said that the project involved transforming the canal banks into two stations: transit trade and maritime industries.

The project also aims at expanding and deepening the canal to double its water area and double the number of passing ships; hence, increasing the revenues. The project envisages constructing a technology valley for advanced industries where raw materials are manufactured and exported.

To ensure integration, planners intend to construct an agricultural hinterland behind the three development areas to host three million permanent residents and another three million temporary residents who will work for foreign exporters.

 The cost is estimated at $10 billion in addition to $5 billion for basic infrastructure; to be funded by Arab investors and local bank loans in addition to the investment budget allocations, says Qaddour who has contributed to the project plan.

Presented to the competent authorities in 1997, the project aims at developing the Suez Canal region, which comprises five governorates. Up until now, only two ports and one technology valley have been constructed.

“These are haphazard projects based on no plans,” said Qaddour, “and the worst bit is the widespread corruption practiced by some businessmen who bought land and froze them pending higher prices, in agreement with some government officials.”  

 Teamwork required

Qaddour stresses the fact that the project is a huge national initiative that cannot be implemented by one single entity or party; which is why he says he has refused to support some presidential candidates even though more than one of them have considered the project in their electoral programs.

Muhammad Hajjaj, a unionist in one of the canal companies, agrees with Qaddour but argues that the current SCA leadership, even after the revolution, hasn’t yet acted properly to increase revenues, despite having the necessary elements.

He adds that the inertia that hit this leadership along 14 years has made it unable to come up with or implement any promotional or operational ideas to increase revenues, hence limiting it to the role of a tax collector.

Hajjaj claims that many SCA companies have been stripped of their experts and turned into losing companies though once being a great entrepreneurship example. However, had it not been for him, his colleagues and the revolution he says, these companies would have been sold rather than putting them back on track.

An upstream battle

“It’s not SCA’s choice to be only be a tax collector,” explains Abdul Tawwab Hajjaj, advisor to the SCA Director. “The SCA regulations allow it to only manage the waterway and make it suitable for navigation; the development of the surrounding areas is the responsibility of the state.”

According to Hajjaj, SCA welcomes any project on the canal gates but not on its banks due to the sediment pools used to expand and purify the canal.   

“The ship purveying project is doomed due to the lack of raw materials,” he said, criticizing the canal development project. “Importing such materials would not bring in revenues. In addition, building and repairing ships by SCA needs very huge investments, which SCA doesn’t have simply because it is a state-owned enterprise that gets its budget from the government and can’t exceed it by implementing new projects.”