WSJ: Suez Canal looking to secure advance payment for tolls

Mohab Mamish, chairman of Egypt’s Suez Canal Authority, told the Wall Street Journal the authority is asking regular users of the canal to pay for fees as much as five years in advance in return for a 3 percent discount.    The Suez Canal Authority (SCA) is asking major ocean carriers to pay canal fees three to five years in advance, SCA Chairman Mohab Mamish confirmed to the Wall Street Journal in a recent interview.
   According to Mamish, the plan is to have regular users create an account with SCA into which they will deposit funds from which the canal will deduct transit fees when vessels use the important waterway connecting Asia and the Middle East with the Mediterranean and North Europe. In return, the SCA will offer a 3 percent discount on canal tolls.
   Mamish said the authority is already in talks with container shipping industry leaders Maersk Line, Mediterranean Shipping Co. (MSC) and CMA CGM, and may reach an agreement by next week, though it would not go into effect until the beginning of 2017.
   The Suez Canal has seen increased competition in the last few months from the newly expanded Panama Canal, which opened in July, allowing vessels nearly three times the previous limit to transit the Central American gateway.
   Mamish told WSJ that when the Suez Canal announces its toll structure for 2017 in January, “A cut in tolls is under consideration” in order to remain competitive.
   “The exports by U.S. refiners to Asia, and especially countries like India, will boost our revenue significantly,” he added.
   The Suez Canal posted $3.18 billion in revenues during the first half of 2016, a 4 percent increase from the same 2015 period, and is now the largest contributor of foreign currency to Egypt’s economy, according to WSJ.