Only eight days after Suez Canal certificates went on sale, LE61 billion had been raised. From the first day of the certificate's issue, 4 September, demand exceeded all expectations. The governor of the Central Bank of Egypt, Hisham Ramez, said that the original forecast was that the funds would be collected over a couple of months, but the demand had been “unprecedented.” Speaking on television, Ramez said that the raising of such a large amount of money over such a short period of time had never happened before, at least not in Egypt. The money will be used to build a new channel parallel to the old Suez Canal, doubling the traffic capacity of the existing waterway to around 90 vessels per day, thus earning more hard currency revenue. According to Mohamed Mameesh, chairman of the Suez Canal Authority, the expansion the canal is expected to bring in some US13 billion in annual revenues by 2023, compared to the current revenue of around US5 billion. The Suez Canal has traditionally been one of Egypt's main hard currency earners, alongside tourism and remittances from workers abroad. Revenue from the canal has kept the economy afloat over the past three years, when tourist numbers plummeted after the 25 January Revolution. A government-guaranteed yield of 12 per cent has been offered on the Suez Canal certificates, higher than similar savings instruments, making them attractive to many investors. While the yield may appear high, it is something of a bargain for the government since it borrows from the banking sector through treasury bills and bonds at a rate of around 14 per cent. The certificates have been sold in various denominations (LE10, LE100 and LE1,000) through public and private banks; earlier this week thousands of post offices across the country also began selling the certificates. Many of these saw long queues of citizens lining up to take advantage of the new investment opportunity. Some branches of public banks remained open after hours to service buying orders. Many commentators said that the high demand was not just because of the high interest rates but was the result of a desire to contribute to a national project and the economic recovery of the country. While the money raised will be used for construction of the new waterway, the area as a whole will also be developed. A consortium led by Dar Al-Handasah, an international project design and management consultancy firm, has won the contract to prepare a master plan for development of the Suez Canal corridor in six months' time. A conference held in Cairo this week, “Enhancing Trade through the Suez Canal Corridor Development Project,” examined the potential of the new waterway and corridor and offered recommendations to optimise the benefits of the projects. Magdy Radi, assistant minister of foreign affairs for international cooperation, said that the demand for the certificates was a sign of public enthusiasm for what is potentially a hugely beneficial project. Experts at the conference said that if properly developed, the corridor could attract many new industrial projects, but that these would need to be carefully thought through, notably with regard to infrastructure. Douglas Anderson, regional director for the Middle East and North Africa of ACDI VOCA, a non-profit economic development organisation, highlighted Egypt's potential for exporting fresh and processed produce, but added that new railroad lines extending to the Suez Canal would likely be needed for domestic transport, along with new cold stores and refrigerated vehicles. Marawan Al-Sammak, chair of Ship & Crew Egypt, a container services and logistics business, said there is a need for new legislation that allows the private sector to play a bigger role in the economy. The private sector is unlikely to be involved in the corridor project for some years, he said, at least until the necessary infrastructure is in place. Urs Moll, managing director of Pacific International Lines (PIL) Egypt, a transport company, said that the project needs to be seen in the longer term. While the new waterway will improve the canal's operations, he said, revenues may not be as lucrative as expected since trade volumes through the waterway will depend on the larger condition of world trade. World trade is estimated to grow at five per cent annually, Moll said, which should mean that the number of ships using the canal will increase. However, operators may decide to use larger ships instead of increasing the number of ships using the canal. Moll did not expect there to be a sudden return on investment on the building of the new waterway, saying that this is likely to happen over 20 years instead. Rather than developing new ports, the government should focus on developing those it already has, he added. Basel Kamel, an engineering professor at the American University in Cairo, said that the success of the planned corridor will rely on the creation of sustainable communities. The existing satellite cities, planned to house 22 million people, have thus far failed to do because of their lack of amenities, he added. Most important of all, according to Mohamed Kasem, chairman of the World Trading Company, which exports textiles, will be for the new projects to focus on development and not just growth. Egypt has had experience of going for growth, he said, but the results have not been uniformly happy since this has not always been linked to development.
