Suez Canal revenues set to slide 20% in '09

Cairo: Revenues from the Suez Canal are slumping drastically, and could be down 20% year-on-year for the whole of 2009 politicians in Egypt have been warned.
"We're bracing for a significant decline in canal revenues this year," Suez Canal Authority (SCA) spokesman Tarek Hussein told local media. "And 90 percent of that decline will be directly attributable not to piracy, but to the dismal economic climate."
"The canal's importance to the national economy cannot be overstated," Mohamed Mahmoud Youssef, president of Beni Sueif University (about 220km south of Cairo) and former head of Cairo University's commerce faculty told local media. "Along with tourism, and remittances sent home by Egyptians working abroad, the canal represents one the country's three main sources of hard currency."
According to Hussein, last year saw the highest annual canal revenues at 5.4 billion dollars, while the highest-ever monthly revenue of 504 million dollars was registered last August. Since then the global economic slump has hit revenues hard, as opposed to the rise of pirates in the Gulf of Aden, a phenomenon that has had little affect on canal transits, authorities maintain.
"The Suez Canal is actually a safer route than round the Cape of Good Hope, where there is no such protection," said Hussein. "It should be noted that the Saudi Arabian super-tanker (Sirius Star) hijacked by pirates last November off the Kenyan coast was en route to the U.S. via the Cape, not by way of Suez."
The canal has already registered sharp losses. On May 9, Minister for Finance Youssef Boutros-Ghali said canal revenues between October and December of last year fell 13.4 percent in comparison to that period a year earlier. According to Hussein, canal receipts in January and February this year were 20 percent lower than for the corresponding two-month period in 2008.
"And we're expecting further declines throughout 2009, although we can't predict exactly how much," said Hussein. "The economic crisis has affected every country in the world, and has had a particularly negative impact on the maritime transport sector."
Earlier this year, government officials predicted that annual canal revenue for 2009 would not decline more than 3.5 percent. But on May 10, Boutros- Ghali told members of parliament that this year's canal receipts could face year-on-year losses of as much as 20 percent.
Due to the grim forecasts, Hussein says the SCA has temporarily ruled out raising canal transit fees.
"Every year for the last three years, the SCA has raised transit fees by between 2 and 4 percent, in line with global economic growth and rising levels of world trade," he said. "This year, though, the authority decided against raising fees in light of prevailing economic circumstances." [26/05/09]

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