The Egyptian government is in talks with representatives of Suez Canal Container Terminal (SCCT) on a contract extension of the concession for the East Port Said port, located at the entrance of the Suez Canal, Ahmed Amin, an advisor to Egypt’s Transport Minister told Reuters.
The focus of the new stage of talks, scheduled to take place in December, will be a 14-year extension estimated to be worth over USD 1.5 billion, Reuters reported.
Under the renegotiated deal SCCT would be freed from paying rent and other fees in exchange for an USD 80 million investment into a new pier construction, according to Amin.
Carriers are favoring ever more Asia-US East Coast container services via the Suez Canal route instead of the traditional Panama Canal route, according to UK-based shipping consultant Drewry.
One of the reasons behind the switch is that substantially larger ships can be deployed on the Suez route.
The average size of ships on the Suez route is about 7,500 teu, whereas on the Panama Canal route the average is about 4,500 teu due to the Panama Canal’s current maximum size limit of about 5,000 teu.
The switch to the Suez Canal route has now absorbed 91 post-Panamax vessels, Drewry’s data shows.
The trend may expand even further as expansion of the Suez Canal gears up.
Earlier in October the Egyptian government awarded Suez Canal expansion contracts.
The ‘new’ Suez Canal will partially run in parallel to the current waterway and entail widening and deepening of existing parts thereof.
It is expected that the expanded canal will result in doubling of revenues for Egypt by 2023.
World Maritime News Staff; Image: SCCT