CAIRO — The Suez Canal Authority (SCA) has halved transit fees for cruise ships that dock for a minimum of 48 hours in at least two Egyptian ports as the country promotes tourism.
SCA head Lt. Gen. Osama Rabie said during a meeting with a delegation from the Ministry of Tourism and Antiquities Nov. 11 that the SCA is offering incentives to encourage cruise ships to dock at Egyptian ports on the Red Sea and the Mediterranean.
“The SCA is seeking to add several tourist attractions to the Egyptian tourism map, namely the Suez Canal International Museum, scheduled to open next year, Saint Agatha’s Church and the Dome Building in Port Said,” Rabie said.
“The SCA will also … establish murals on both sides of the canal illustrating its various historical stages, which will add aesthetic value to sailing through the Suez Canal,” he added.
The Suez Canal, considered the fastest sea corridor for trade between Asia and Europe, is one of the main sources of foreign currency for the Egyptian state. The canal’s revenues have slightly decreased during fiscal year 2019/2020 at $5.72 billion, compared to $5.75 in fiscal year 2018/2019. The decrease was a result of the COVID-19 outbreak, which caused a slowdown in global trade movement by 18.5% in the second quarter of 2020.
Ahmed al-Shami, an adviser on maritime transportation at the Ministry of Transport, told Al-Monitor, “This decision is an incentive for cruise ships to pass through the Suez Canal, which will boost the tourism sector, which has been hit hard by the coronavirus. This will also increase the canal’s revenues, something that is of major importance for the Egyptian economy in these difficult times.”
“As a result of the pandemic, we are going through a situation that requires searching for unconventional means to alleviate the impact of the global trade slowdown on the national economy as much as possible,” he added.
Shami stressed that the SCA decision’s positive impacts on Egyptian navigation and tourism will emerge after the coronavirus is contained and the lockdowns are over.
Shami also said the Suez Canal’s revenues decreased only slightly in the past fiscal year that ended in June, which is “a good indicator despite the commercial recession caused by the pandemic,” he said. He also expects the canal’s revenues to further decline this year, but not more than 6% from last year.
Wael Qaddour, the SCA’s former deputy chairman, did not agree with Shami. “The decision will not [increase] the canal’s revenues, as cruises are almost completely halted because of the pandemic. Even if cruise ships were exempted from traffic fees, there won’t be a major change because of the general lockdowns in most of the world’s countries,” he told Al-Monitor via telephone.
Qaddour stressed that the SCA decision is an extension of a program that offered incentives for ships back in 2008, during the global financial crisis. “The decision was renewed as an incentive to boost ship traffic. But in the meantime, it will be useless for tourism and for increasing the revenues of the canal, because of the pandemic that has severely affected the global trade movement,” he said.
Qaddour expects a sharper decline in the Suez Canal’s revenues this fiscal year with the impacts of the pandemic.
Yaman al-Hamaki, a professor of economics at the Faculty of Commerce at Ain Shams University, told Al-Monitor that the move is “a major step to increase the canal’s revenues, which are an important source of revenue for the state.”
Hamaki expects the second wave of the coronavirus to severely affect global trade movement, as many countries are likely to impose general lockdowns, which will deal a painful blow to Egypt’s foreign investments and trade exchange.
“The SCA ought to offer incentives similar to what is being offered to cruise ships. This could be a good step to counter any potential effect of the global lockdown and to attract more ships,” Hamaki said, adding that officials should consider other incentives and facilities like those offered to cruise ships.