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The New Arab

Russia to begin construction on Suez port next year

Egypt is currently seeking to modernise the Suez Canal [Getty]

Date of publication: 26 November, 2016

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Moscow has agreed to construct a new Egyptian port following stalled negotiations after a Russian airliner was downed by suspected IS militants over the Sinai last year.


Construction is set to get underway on a Russian industrial port in the Suez Canal following a deal reportedly agreed with Egypt, according to media in both countries.

Russia's Trade Minister Denis Manturoc announced on Friday that Egyptian President Abdel Fattah al-Sisi had allocated Moscow an 80 hectare area in Port Said that could later be expanded to an industrial zone of some 2,000 hectares (20 sq. km).

Construction is set to start next year.

Moscow initially agreed with Cairo on the construction of a Russian industrial zone in Egypt in 2014.

However, negotiations on a deal ground to a halt after a Russian airliner was downed over the Sinai in October 2015 in a suspected terrorist attack. 

Russia has said that the new industrial zone will provide 77,000 jobs, with $4.6 billion expected to be invested in the construction of the area by 2035.

Russian firms are set to design and construct the facility and will be allocated tax breaks.

In recent weeks some analysts have suggested that Cairo is seeking closer ties with Moscow having alienated its traditional allies in Riyadh by voting against a Saudi-backed UN resolution on Syria.

Instead Egypt sided with Russia, leading Saudi Arabia to cut crude oil supplies to Egypt - currently in the midst of dire economic straights - that have forced the North African state to request assistance World Bank assistance.

Further angering Saudi Arabia and its Gulf allies, Sisi has notably expressed recent support for the regime of Syrian President Bashar al-Assad in Syria.

This mirrors Moscow's firm backing for the regime. 

Last week Russia announced plans to expand its naval base in the Syrian Mediterranean coastal city of Tartous, in addition to plans to construct a permanent air force base in the area.

Egypt has also reportedly sent air force crew to bolster Syria's regime.

Cairo is currently in the midst of modernising the Suez Canal with plans to develop additional Chinese, and Italian industrial parks previously on the table. 

Previous economic development plans on this scale have been unsuccessful in revigorating the country's economy, leading to questions over Sisi's vision and leadership.

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