Egypt Tests New Suez Canal Extension Amid Revenue Plunge

Egypt has announced the successful testing of a new 10-kilometre channel near the southern end of the Suez Canal, as revenue from the strategic waterway plunges amidst escalating attacks by Yemen’s Houthi militants in the Red Sea.

The Suez Canal Authority (SCA) confirmed that two ships traversed the newly extended section during a trial run without incident.

The expansion is part of efforts to bolster the canal’s operational resilience following the 2021 grounding of the Ever Given container ship, which blocked the waterway for six days and disrupted global trade.

“This expansion will boost the canal’s capacity by an additional six to eight ships daily and enhance its ability to handle potential emergencies,” the SCA said in a statement.

The project extends the canal’s two-way section to 82 kilometres from the previous 72 kilometres, with the total length of the waterway spanning 193 kilometres.

The developments come as Egypt faces a dramatic decline in Suez Canal revenue, a vital source of foreign currency for the nation.

Egyptian authorities have disclosed that the country had lost approximately $7 billion in canal earnings in 2024, representing a drop of more than 60 percent compared to 2023.

The downturn is attributed to heightened regional instability, particularly the November 2023 onset of Houthi attacks on vessels in the Red Sea.

The militants claim the assaults are in solidarity with Palestinian factions in Gaza.

In response to the crisis, Egypt has expedited its canal enhancement projects, including the newly completed channel, to secure its position as a key transit route between Europe and Asia.

The SCA is also considering further expansions to strengthen the canal’s competitiveness and mitigate the impact of geopolitical disruptions.

gandae@businessdayafrica.org