Dutch-led consortium scoops $1.5bn Suez expansion contract

A consortium consisting of Van Oord, Royal Boskalis Westminster, NMDC (Abu Dhabi) and Jan de Nulhas has acquired a $1.5bn contract to expand the Suez Canal. Each partner has an equal share of $375m. 

The project will widen the existing canal and deepen it to 24m. It will also create a 50km "dual carriageway" passage to enable ships to transit in both directions at the same time.  

It is thought that the work will require up to 36 dredgers to remove about 250 million cubic metres of material. 

Pierre Catteau, an official from Deme Group, told the Reuters news agency that project would require a massive mobilisation of equipment from around the world. He said: "I think we were all surprised at how fast this came on the market, how fast it was tendered and how fast it will be executed. But it’s possible and we will put all efforts to make it happen." 

The project is due to start this year and is expected to be completed in 2015. 

The Egyptian government raised the $8.5bn funding for the project in only eight days after a huge public response to a call for donations.  

The project is one of the centrepieces of the economic programme of the government of President Abdel Fattah al-Sisi. Egypt hopes the expansion will increase revenues from the waterway from $5bn last year to $13.5bn by 2023. It also plans to develop a 76,000 square km industrial centre and logistics hub associated with the canal. 

At the weekend the Egyptian Finance Ministry said it expected GDP to rise 6% in 2017/18, partly as a result of an increase in private sector investment 15% of GDP. 

The statement said: "These are realistic and achievable targets which will be supported by the government of Egypt’s commitment to sound macroeconomic policies, in particular a concerted drive to achieve fiscal sustainability." 

Egypt’s real GDP in 2013/14 reached 2.2%, almost the same as in the preceding fiscal year.