Egypt to unveil $8.5 billion Suez Canal expansion

Egypt on Thursday will unveil a major expansion of the Suez Canal, which President Abdel Fattah El Sisi hopes will boost the country's ailing economy after years of unrest.

An elaborate ceremony in the canal city of Ismailia will be hosted by the president amid tight security measures after a series of attacks by armed groups in the Sinai Peninsula and the capital.

Egypt's black, white and red flag now adorns streets across much of the nation, along with banners hailing the project. The government declared Thursday a national holiday, and banks and most businesses were closed.

A year ago, Sisi announced the $8.5 billion expansion, saying it would be a major national accomplishment on par with President Gamal Abdel Nasser's nationalization of the Suez Canal in 1956 and the building of the Aswan Dam.

Economists and shippers have questioned the value of the project, saying the increased traffic and revenues the government is hoping for will depend more on the growth of world trade than the capacity of the crucial waterway, which links the Red Sea to the Mediterranean and allows vessels to avoid sailing around the southern tip of Africa.

But the government says the project, funded entirely by Egyptian investors, will more than double the canal's annual revenue, to $13.2 billion by 2023, injecting foreign currency into an economy that has struggled to recover during the years of turmoil that followed the 2011 uprising to topple President Hosni Mubarak.

The expansion involved digging and dredging along 45 miles of the 120-mile canal, making a parallel waterway at its middle that will facilitate two-way traffic. With a depth of 79 feet, the canal now allows the simultaneous passage of ships with draft (depth below the waterline) of up to 66 feet.

The project was initially estimated to take three years, but Sisi ordered it completed in one.

"Egypt makes history," read the banner headline of Thursday's pro-government daily Al-Watan. The front page of another daily, Al-Maqal, said "Rejoice, it is worth it!"

Thursday's ceremony will be partially overshadowed by a threat by an affiliate of the Islamic State in Iraq and the Levant (ISIL) to kill a Croatian hostage kidnapped in Cairo last month, a grim reminder of the threat to Egypt’s stability posed by armed groups.

The affiliate released a video Wednesday threatening to kill the Croatian in 48 hours if Egyptian authorities do not release "Muslim women" held in prison, a reference to women detained in the government's broad crackdown against supporters of Morsi.

Egypt has seen a surge in attacks by armed groups since Morsi's ouster, in the restive north of the Sinai Peninsula and the mainland, focusing primarily on security forces.

Foreign interests also have also been targeted, including the Italian Consulate in Cairo, which was hit with a car bomb last month. That came just days after another bomb killed Prosecutor General Hisham Barakat in an upscale Cairo neighborhood.

However, Wednesday's video was the first to be released by armed groups showing a kidnapped foreigner in Egypt — an ominous escalation as the country tries to rebuild its vital tourism industry. The professionally made video resembled clips released by ISIL in Syria and Iraq, indicating closer ties with its Egyptian branch.

The government says it has taken major steps to prevent anyone from disrupting Thursday's ceremony, and pro-government media have portrayed the canal expansion as a victory over extremism.

"Rejoice, for it is a victory over terrorism," wrote Al-Maqal's editor and prominent commentator Ibrahim Issa. "Rejoice, for it is a tremendous win for a country suffering from the blows of terrorism."

Wire services