UAE geopolitical analyst Theodore Karasik is confident the Suez Canal will generate far higher revenues annually that the expected US$8 billion, but more like $13 billion a year by 2023, well up from the $5.3 billion it made last year.
What's more, said Dr Karasik, the number of ships passing through the canal daily will rise to 97 from the current 49, reported Dubai's ME Construction News.
"I think that this figure ($13 billion revenue) is realistic, given all the projections for the growth of shipping over the course of time," he said.
"But I also think the figure may be higher, based on the shipping to and from Iran and Europe, because by then, the Iranian market will be functioning in a robust manner," said Dr Karasik.
"The lifting of sanctions for Iran is going to go slowly, but people are already lining up to get into Iran across a number of different sectors.
"The new Suez Canal is going to be very valuable for not only Iran, but also for investors who haven't had access to the Iranian market for more than 40 years," he said.
But other experts are less confident about the positive impact of the expanded Suez Canal, disputing the official numbers released by the Egyptian government.
Economist Ahmed Kamaly, with the American University of Cairo, told Reuters that the projections are "wishful thinking," suggesting that sluggish world trade will make it difficult for the project to deliver immediately on its promise.
"There was no viability study done, or known of, to assess the viability of the project," said Mr Kamaly.
Jackson of Capital Economics says world trade must grow nine per cent the canal is to meet revenue targets. But Reuters reports it has only grown three per cent over the last four years.
Despite such pessimism, the region shows considerable optimism about the impact of the expanded Suez Canal.
With the Middle East undergoing a period of intense economic development, governments are investing heavily in infrastructure to improve transport and trade links.
The Sohar Port and Freezone in Oman will expand total capacity to six million TEU per annum, up from 800,000 TEU per annum.
With $15 billion invested to date, the deep-sea port and free zone is one of the fastest growing in the world, thanks to its location and interconnectivity.
Now under construction, Hamad Greenfield Port is expected to have six million TEU capacity a year. The $7.4 billion project will cover 26.5 square kilometres and have three container terminals.
Dubai will develop Container Terminal 3 at Jebel Ali Port, expanding capacity from 15 million TEU to 19 million TEU a year. The project is expected to be completed by the end of this year at a cost of $850 million.
Finally, Saudi Arabia's Saudi Global Ports (SGP) Container Terminal at Dammam King Abdul Aziz Port opened in April 2015. Its capacity is five million TEU per annum.
But with development still ongoing, the $500 million project is expected to have a total capacity of 6.8 million TEU per annum.
"The GCC benefits because of the enhanced trade route but also because the trade route attracts more (maritime) security, particularly, in the Mediterranean but also in the Red Sea and the Gulf of Aden," says Dr Karasik.
"With the Saudi-led operations in Yemen, it's going to be very important to keep this sea lane open," he said.
A final reason for the GCC is how the GCC will be using new port facilities that are popping up in Kenya and in Somalia in the future, and this will become part of the system," said Dr Karasik.
WORLD SHIPPING
23 September 2015 - 08:06
UAE expects new Suez Canal will nearly double regional port growth
UAE geopolitical analyst Theodore Karasik is confident the Suez Canal will generate far higher revenues annually that the expected US$8 billion, but more like $13 billion a year by 2023, well up from the $5.3 billion it made last year.
WORLD SHIPPING
23 September 2015 - 08:06
UAE expects new Suez Canal will nearly double regional port growth
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