Egypt inaugurated the expansion of the Suez Canal on Thursday with great celebrations and a list of international figures attending the ceremony.
The Egyptian government, which has dubbed the new extension of the Suez Canal “The Great Egyptian Dream,” is expecting the canal to give the country a boost to economic development that could triple the waterway’s revenues over the coming eight years.
The list of guests who attended the ceremony gives an insight into Egypt's foreign policy and its alliances under the leadership of President Abdel Fattah el-Sisi.
Dozens of Arab leaders, presidents and prime ministers of African countries, along with European delegations accepted invitations to attend the ceremony.
The most high profile European official to attend the ceremony was French President Francois Hollande, who confirmed he would be present early this week.
The United Arab Emirates is one of the Gulf countries sending dignitaries to attend the ceremony. The UAE's National Marine Dredging Company (NMDC) was the leading company involved in drilling the new canal and the country's Crown Prince Mohammed bin Zayed Al Nahyan, Defence Minister Mohammed Bin Zayed, as well as the emir of Dubai - UAE Prime Minister Mohammed Bin Rashid - were all present.
The £6 billion project, which included the digging of a 35 kilometer parallel canal and further deepening it to allow for two-way traffic, hopes to make the canal “the route of choice for ship owners the world over, putting any alternative routes out of competition,” the Suez Canal Authority wrote on its website.
Egyptian President Abdel Fattah el Sisi hopes that the new improvements to the Suez Canal will be the country’s solution to its current economic problems, including a loss in revenue due to declining tourism and foreign trade.
Egyptian authorities believe the canal could double the amount of ships passing through the waterway per day, leading to an estimated increase in annual revenue from the current $5 billion to $13.2 billion by 2023.
The expansion marks the third time since the Suez Canal was first built in 1869 that the waterway has been significantly widened to allow for more ships to pass through it simultaneously.
The Suez Canal, which has long been an important source of state revenue for Egypt, provides the quickest waterway route between Asia and Europe and carries around 7 percent of global seaborne trade.
Since the project was announced, opponents of the military coup against Egypt's previous and only democratically elected President Mohamed Morsi have accused the new regime of "stealing" the idea from the deposed president and claimed it was but a limited part of Morsi’s greater plan for Egypt.
Supporters of Sisi’s government claim that the two projects are completely different and only happen to be focused on the same location.
Morsi’s project was to develop industrial, agricultural, commercial and technological zones that span across the canal of 193 kilometres, with the aim of attracting more local and international investors.
Expectations within Egypt regarding the canal are high since President Sisi has promised his people that the project is the answer to many of country's problems, calling the Canal “Egypt’s gift to the world” and a source of national pride.
But many wonder whether the billions spent on the project could have been better spent elsewhere, with questions being raised about how many more ships will follow the route once the new channel opens since the canal was not being used to its full capacity even before the renovations, according to shipping advisor Drewry Maritime Consultants.
The number of ships passing through the canal has been falling in recent years due to declining trade growth and a move by ocean carriers to place more goods in larger ships.
A senior analyst at Drewry, Neil Davidson, stated that global trade between Asia and Europe will determine traffic volumes, not the size or depth of the canal, nonetheless, “there will be growth, but whether there’s sufficient growth to double or triple revenue in eight years is an open question.”
The expansion of the canal will reduce waiting times and allow ocean carriers to save some money on fuel and other operating costs, Davidson added.
Drewry stated that weekly services of Asia-to-Northern-Europe shipping lines and Asia-to-Mediterranean lines have been declining since the beginning of 2013, although the number of shipping containers has risen.
Economic analyst and CEO of the Signet Institute, Angus Blair, told Sky News that the Canal will probably bring in extra revenue and help with Egypt's economic recovery, but more should be done to deal with the strains caused by Egypt's growing population.
"I think it would be good to have more infrastructure spending across the country as well, to get people back to work near where they live, so that people can see changes in their environment - not just far away,” Blair stated.
"But one thing I would say about the Suez Canal is that we can't really put a price on a change in national sentiment."
The main aim of the project for Egypt is to minimise competition from the Panama Canal for China-US trade, said Dirk Visser, a shipping consultant with Dynamar B.V. in the Netherlands.
“It’s a defensive measure against the new, much-larger Panama Canal locks,” Mr. Visser said, adding that the canal will only remain an attractive alternative for China to US trade routes if tolls do not rise significantly.