Egypt: Israel's threat to Suez Canal's supremacy

Israel has announced plans to build a rail-link between the Mediterranean and the Red Sea which could challenge the Suez Canal's monopoly. Israel's Prime Minister Binyamin Netanyahu announced that the project would link Ashdod to Eilat and provide an alternative freight route from Asia to Europe. Ships would drop off freight at one port for it to be carried by rail to the other for its onward journey. Israel says there had been much interest from China and India.

There would be no strategic benefit to Israel other than to provide a source of income. There have been many other projects discussed linking the Mediterranean and the Red Sea, none of which has seen the light of day. The Israelis have proposed building an oil and gas pipeline (similar to the Egyptian-operated Sumed line); and they have made designs for a canal from the Mediterranean to the Dead Sea and to the Red Sea, to refill the rapidly decreasing Dead Sea and to exploit the difference in water levels for hydroelectric power generation.

The Suez Canal has remained one bright spot on the Egyptian economy over the past year as its revenues depend more on the state of the world economy and are impervious to the political turmoil in the Nile Valley. Egypt will be watching warily for any challenge to its dominant position and will hope this latest project will stay on the drawing board like previous schemes.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

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