Egypt’s Suez Canal Authority is reportedly in discussions to change the way it charges tolls for transiting the canal, levying charges up to three years in advance, according to Ahram Online.
The canal, recently widened and deepened at a cost of US$4 billion, has not seen the increase in revenues Egyptian authorities had hoped for since its opening in August, 2015. In Q1, 2016 the canal generated $1.236 billion, up only marginally over the same period last year.
With the ongoing low oil price and a wider lull in global trade, the cost of the upgrade has not been matched by an increase in traffic, despite the canal now being able to handle two-way traffic, vastly increasing its capacity.
A source told Ahram Online that Maersk, CMA CGM and MSC were currently in negotiations with the Suez Canal Authority over the proposed changes to fees. The shipping lines could receive a discount for being charged in advance.
The upfront revenue could provide a much-needed boost for Egypt’s ailing economy, which has struggled to recover since the 2011 uprising, with tourism particularly badly impacted. The Suez Canal provides a huge source of foreign currency for the government, so its success is critical to the country at large.
