Although traffic in the Suez Canal has declined sharply this year, the Egyptian government is considering plans to expand the waterway's second canal and prepare for a future with more business than ever before.
The head of the Suez Canal Authority, Osama Rabie, announced plans to convert the last parts of the single-lane canal to two-lane roads, according to Bloomberg. If the second canal were completely completed from one end to the other, it could allow traffic to pass continuously, without the one-way convoy requirements that have defined canal navigation for generations.
Financing such a large expansion may be a challenge in the near term. In a good year, the Suez Canal brings in $9 billion or more in dollar-denominated revenue, but the turmoil in the southern Red Sea has not been helpful.
According to Egyptian President Abdel Fattah El-Sisi, the channel’s revenues have decreased by half compared to what they were previously.
Rabie said that the expansion plan is still under study, and a final proposal has not yet been developed.
The plan will expand on the ongoing construction program that began after the ship was grounded since whenwhich established itself firmly across a narrow stretch of the lower canal in 2021. The Suez Canal Authority is working on measures to improve navigability in the southern stretch, including widening one section and adding a 10-kilometre-long parallel canal extension.
Any additional work must attract external financing or compete for resources with Egypt's debt repayment programme. The government needs to save $29 billion to service its external debt in 2024, according to the country's central bank, thanks to the large volume of principal repayments due.
Although the Red Sea disruption is affecting canal operations, Egypt has not yet criticized Yemen's Houthi rebels, who have been attacking ships for months. Egypt has also moved away from a maritime security mission to combat the Houthis near the Bab al-Mandab Strait – even though Egypt has the largest naval force in the Arab world.
