Suez toll cut likely to tide over economic slowdown

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Nov 2008

The Suez Canal might adjust its tolls for ships for 2009 in light of slower world economic growth and the international financial crisis, the chairman of the Suez Canal Authority said. Revenue from canal tolls could fall slightly this year, after the authority initially expected a 10-20 per cent increase, Chairman Ahmad Ali Fadel added. He was quoted by the Egyptian state news agency MENA. The canal faces the prospect of declining traffic because of a drop in trade between Asia and Europe and because pirates based in Somalia have driven some shippers to reroute their vessels around the Cape of Good Hope.
"Fadel ... did not rule out reductions in the transit tolls for some types of ships, and he also did not rule out an increase by a reasonable amount in these tolls," it added.
"If circumstances require a cut in tolls for certain routes, in the interests of the world economy, then that will be taken care of," the chairman added.
"If things go as desired there will be a slight fall [in tolls this year], while the revenue increase we were expecting was about 10 to 20 per cent," he said.
It was not clear if he was talking about calendar 2008 or the current financial year, which began on July 1.
Statistics from the Suez Canal Authority show that in the first 10 months of 2008, the canal brought in $4.57 billion (Dh16.77 billion), almost as much as in all of 2007. The canal raised tolls by an average of 7.1 per cent starting from April.
On Tuesday canal officials said they were still expecting an increase of about 17 per cent in tolls in calendar 2008.
Fadel said: "The canal can deal with a slowdown in international growth rates, but if there is a recession, then that is another matter." He said both piracy and the international financial crisis were problems for the canal, but the crisis was more serious.

Source: Reuters