CAIRO: Egypt's Suez Canal Authority reported this week that the passageway's revenues for August were down. The report comes after analysts had hoped August would continue to show signs of recovery from the global economic crisis and piracy threats in the Gulf of Aden, but the figures reported are not promising. According to the canal's oversight organization, last month saw a decrease of $132.7 million as compared to the previous year as well as an $11.1 million drop off from July, which has left officials and analysts bewildered. “We had expected to continue to see slight gains in revenue from the canal, but it looks like the worst is not behind us at this point. I wonder if the Egyptian ship hijacked had something to do with August's income. It is too early to tell, but we will look closely at September's gains or losses to tell,” an official at the authority said on Thursday morning, speaking on condition of anonymity because they were not authorized to speak to the media. The official confirmed that canal revenue was at around $370 million in August – compared to $504 million the year before. In July, the canal brought in over $380 million. The source said that 1453 vessels passed through last month with cargo amounting to 62,5 million tons, a decline over the same period last year by 540 vessels and 68 ships less than July. Piracy has become a growing threat to canal revenues and just last month, an Egyptian vessel was taken by Somali groups in the Gulf of Aden. This has led to a number of shipping companies looking elsewhere to transport their goods instead of using the Suez Canal. In a February press release, Grand Alliance, a container consortium of four large shipping lines, announced it would be rerouting some of its vessels sailing east between Europe and Asia around the Cape of Good Hope, citing “high Suez Canal toll fees, which are difficult for carriers to afford in the current economic environment.” Piracy is a threat. Analysts, led by the Chatham House foreign policy think tank, have called for maritime reinforcements to battle the increasing number of piracy acts that have plagued the coastal waters of Somalia. They argue that if drastic measures are not taken immediately, the Suez Canal could be cut off. This is not good news for the Egyptian government, who has earned over $4 billion from ships passing through the water corridor that links the Mediterranean Sea and the Red Sea. If the situation deteriorates further, the Cape of Good Hope – a 20-day voyage around the southern tip of Africa – could become the main passageway for cargo. The Chatham House report published last September at the height of hijackings said insurance premiums for shipping through the Gulf of Aden have increased tenfold. The combined danger and cost, it said, could “mean that shipping could be forced to avoid the Gulf of Aden/Suez canal and divert around the Cape of Good Hope.” “This would add considerably to the costs of manufactured goods and oil from Asia and the Middle East,” the report said. It also warns that if an oil tanker was seriously damaged in a pirate attack it could cause a “major environmental disaster.” BM
