CAIRO- Fees at the Suez Canal's East Port Said will be aggressively cut to boost its competitiveness, while $50 million will be invested in the shipping hub, Egypt's Suez Canal Economic Zone and Suez Canal Container Terminal (SCCT) said on Tuesday.
The port is located at the northern end of the canal, one of the world's busiest shipping lanes. However shipping companies have complained that its high fees have priced it out of the market, prompting them to shift business to other Mediterranean ports, especially Pireaus in Greece.
"We'll make it competitive. Not only competitive, but aggressively competitive," Yehia Zaki, chairman of the economic zone, told reporters. "Effective tomorrow."
The new fee structure would replace temporary incentives put in place last year, Zaki added.
The Suez Canal Economic Zone, overseen by a government agency, is made of up ports and development zones near or on the Suez Canal. The SCCT is part of East Port Said, an international transshipment hub with deepwater facilities.
SCCT Chief Executive Lars Vang Cristensen said the new fees would be priced in a equation based on the size of the ship and the number of moves it made while in port. He declined to give figures.
The terminal, established in 2004, is operated by majority shareholder APM Terminals, part of Denmark's A.P. Moller-Maersk MAERSKb.CO .
The port has struggled to attract transshipment business in recent years after fees were raised in 2015 and a bridge across the Suez Canal was closed for security reasons in 2016.
In the last year and a half, Egypt and SCCT have expanded and deepened the port, built tunnels under the Suez Canal to improve access to the rest of Egypt and put new incentives in place, Zaki said.
"That as a package should have its impact," he said.
Investments under the agreement announced on Tuesday include heightening six ship-to-shore cranes to handle more mega-vessels and providing at least 15 new rubber-tyre gantry cranes, a joint statement from the economic zone and the SCCT said.
Two tunnels connecting the port to the western side of the canal opened recently, improving access for Egyptian trade, though the tunnels currently close at night.
The economic zone and SCCT said they expected the tunnels to be fully operational around the clock "in the near future".
Last year the port handled 3.1 million twenty-foot equivalent units (TEUs), 21% higher than in 2018, and it is aiming to maintain that level in 2020 despite the impact of the novel coronavirus outbreak, Christensen said at the news conference in Cairo.
(Reporting by Patrick Werr; writing by Aidan Lewis; Editing by Jason Neely and Pravin Char) ((Aidan.Lewis@tr.com; +20-1001174410;))