Sisi Is Trying To Build A New Suez Canal But It's Not Exactly Going According To Plan

Construction problems, over-reaching budgets, and questionable projections are already plaguing the construction of an addition to the Suez Canal.

Amr Abdallah Dalsh / Reuters

An Egyptian engineer works at the Suez Canal.

SUEZ, Egypt – Just three months into his presidency, Egypt's Abdel Fattah el-Sisi has boasted that his revamp of the Suez Canal — which will see an additional canal built along part of the existing route — could be the answer to Egypt's financial woes. But on the grounds of the historic waterway, problems are already brewing.

Water has flooded the construction site twice this week, the result, say engineers, of poor planning and expensive mistakes at the design stage. Global shipping companies are challenging the need for a new canal route altogether, while local construction companies are projecting that the cost of building one will far exceed the estimates given by the Egyptian government.

"At this stage, we still have a lot of questions over whether this can be a profitable or successful venture," said Li Xie, a Chinese investor who recently visited Egypt to examine the investment of Chinese funds into part of the project. "There are concerns."

Standing on the banks of the Nile River, where construction on the new Suez Canal is already underway, Egypt's top military generals have led flashy tours of the new canal route, which will add a 35-kilometer lane branching off the existing 193-km channel, in addition to deepening portions of the original Suez Canal. The Suez Canal had revolutionized shipping by creating a waterway that allowed ships avoid the long trip all the way around Africa to get from the Far East to Europe. The new canal will allow two-way traffic and, say Egyptian officials, cut wait times.

"This project will be like a miracle, it will give huge push to the global trade movement," said General Kamel El Wazeer, head of the Egyptian Armed Forces Engineering Authority.

Like many Egyptian presidents before him, Sisi is seeking to cement his leadership of Egypt on the banks of the Suez Canal. Announcing that the project was already "happening too late" Sisi has promised the Egyptian people that in under a year he will not only build a new canal route allowing two-way traffic along the strategic waterway, but also break ground on a massive new industrial park in the Suez area.

Egypt's state-run newspapers have exalted the project, boasting that it could double the number of that which travel through the canal daily, and boost revenue from about $4 billion annually to more than $13 billion a year in toll fees by 2023.

But engineers and global trade experts say the project is already rife with problems, and are concerned that the estimated profits will likely never be realized.

"According to the figures they are projecting, by 2023 the number of ships will be doubled from 48 to 97, and that is how they figured the gains in income," said Dr. Omar el-Shenety, an economics and trade expert in Egypt who has reviewed the project. "But those projections are impossible because we don't see international trade reaching anything near those numbers in 2023."

El-Shenaty, along with other economists, has criticized the government for vastly inflating the figures, and has suggested that the cost of the project will far outweigh the profits they can hope to earn.

"The cost of the project will be a minimum of $4 billion. Is now really the best time to take all that money out of the Egyptian market?" asked el-Shenaty. The new project comes as Egypt's economy struggles to recover following more than three years of political turmoil, which have seen foreign reserves plummet and investors increasingly weary of sinking money into new endeavors.

Robin Mills, head of consulting at Manaar Energy in Dubai, told the Wall Street Journal last month that he couldn't understand the logic of the Suez Canal expansion. "On the oil side, the canal's importance is likely to wane as European Union oil imports from the Middle East fall. As for liquefied natural gas, the existing canal can already take the largest LNG carrier."

Construction and engineering experts are also criticizing the project, telling BuzzFeed that the state never bothered completing a feasibility study, and that construction is poorly planned.

"Problems are already appearing in the construction site," said Dr. Islam Mamdouh, a civil engineering consultant who has worked on similar projects. He said that the distance between the current canal and the new branch being dug is only 750 meters, whereas engineers recommend at least double that in order to ensure that water won't appear in the building site. "If water appears it is very expensive to dredge, nearly one million dollars a day."

Now that water has already appeared, there are questions over whether it will still be possible to move the site of the new canal route.

Diplomats who were recently given a tour of the construction site said there were questions over who was overseeing the project, and how heavily involved the military was in financing and outsourcing the labor for the massive endeavor.

"This definitely had the feel of the military — in the way it was organized and the type of laborers they hired," said one European diplomat who took part in the tour. He asked to speak off-record as he wasn't authorized to speak to the press. "But like many other things we are seeing under Sisi's new presidency, the lines between private companies, industry, and the military is increasingly blurred. We will have to wait and see what it means for this specific project."



A BuzzFeed News investigation, in partnership with the International Consortium of Investigative Journalists, based on thousands of documents the government didn't want you to see.