Egypt Pushing Ahead with Suez Port Expansion Projects

Posted by Michelle Howard
Thursday, June 12, 2014
Photo courtesy of Suez Canal Authority

Egypt is pressing ahead with plans to develop a new wheat storage facility and expand port operations at two terminals in the Suez area as the country looks to bolster strategic food reserves and attract investment, a top port official said.

President Abdel Fattah al-Sisi, who as armed forces chief toppled Islamist President Mohamed Mursi last July following mass protests, was sworn in on Sunday and seeks to fix Egypt's economy while overcoming political divisions after a long period of turmoil and bloodshed.

Egypt plans to boost its storage capacity in the strategic wheat sector to reduce reliance on imports and cut its 32 billion Egyptian pound ($4.5 billion) overall food import bill. A government minister said this week Egypt wants to be a "global logistics hub" for grain storage.

Hassan Falah, chairman of the Red Sea Ports Authority, said it had recently issued a tender to develop a wheat storage site with a capacity of 2 million tonnes at the port of Adabiya. He declined to disclose the value of the project.

"There are a number of Egyptian banks who are willing to fund the project with any investors and one of them is the National Bank of Egypt," Falah said on a trade visit to Britain this week. "In six months, the winner of the tender will be known."

The National Bank of Egypt could not immediately be reached for further comment.

Falah said Adabiya would add to grain storage facilities at other ports in Damietta, along Egypt's Mediterranean coast, and Safaga, which is situated along the Red Sea.

"Adabiya is in the middle and it is preferred to shorten the distance and can serve cities and governorates in different areas," Falah told Reuters via an interpreter.

Egypt is also making progress in increasing local storage capacity with the help of one of its major Gulf Arab backers, the United Arab Emirates. The UAE has committed to funding the construction of 25 silos to boost storage capacity by a further 1.5 million tonnes.

Falah said Port Tawfik, also situated in Suez and another terminal within his port authority, had issued a tender to develop a multi-purpose port there.

"In the pipeline and under study are expansion projects for yachts and cruise ships at the port," he added.

Authorities have mounted a crackdown on the Muslim Brotherhood, once Egypt's most well organised Islamist group, and its supporters since Mursi was deposed, killing hundreds and arresting thousands. Sisi still faces a violent threat from militants based in the Sinai peninsula, who are believed to have access to weapons smuggled from chaotic Libya.

In May, the army said it had seized 15 tonnes of a material used to make explosives in a town straddling the Suez Canal, a vital source of foreign exchange for Egypt and the fastest shipping route between Europe and Asia.

Falah, who retired from the Egyptian navy as a rear admiral in 2007, said there were no security issues with Suez.

"There are multiple checkpoints throughout Suez. The Suez area is secure," he said.

Sisi's plans include creating a Central Sinai governorate, or administrative area, carved out of the North and South Sinai. North Sinai has seen countless militant attacks on policemen and soldiers since Mursi's ouster.

"A new governorate will be created in the Sinai area," Falah said. "This will mean there will be a lot of improvements in the security situation. It will be much better and not worse."

(By Jonathan Saul, Additional reporting by Shadia Nasralla and Maggie Fick in Cairo; Editing by Dale Hudson)

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