[051214.EN.SEA] Egypt to Rethink Maersk Unit's US$1.5 Billion Suez Box Shop Deal

AN advisor to Egypt's Transport Minister Ahmed Amin has revealed that talks will soon be held to renegotiate the US$1.5 billion Suez Canal Container Terminal (SCCT) concession at Port Said, 55 per cent owned by Maersk port operator APM Terminals.

Mr Amin said talks would focus on the 14-year extension of the concession, pointing out that he had attended talks two weeks ago with SCCT, according to Reuters.

Mr Amin said the extension agreement would partially exempt SCCT from rent and other fees in exchange for the company building an $80 million pier.

SCCT commercial chief Lars Koch-Soelyst declined to comment on the value of the terms, but said there was an ongoing dialogue to find long-term solutions.

Egypt is currently digging a new Suez Canal beside the existing 145-year-old waterway linking Europe with Asia. The government hopes the $8 billion project will stimulate global trade and generate badly needed revenues and foreign reserves after three years of civil strife.

Mr Amin said the government and SCCT had also agreed to begin using a side channel giving small containerships in the Mediterranean direct access to East Port Said, separate from the Suez Canal entrance.

Mr Koch-Soelyst said that would free the port from the constraints of the canal's convoy system and increase its weekly capacity to 80 vessels from 50.

"Vessels cannot access the terminal when the ships are heading north. They can only access the terminal during time gaps during the day," he said. "We are using these intervals to the maximum."

SCCT also wants Egypt to deepen the main port to 16 metres from the current 15.5 metres to allow bigger ships to anchor, but the government has said that must wait until the dredging of the new Suez Canal is completed next year.

Source : HKSG.