The Canal Reborn

As Israeli troops began their negotiated pullback from the west bank of the Suez Canal last week, Egypt could look forward for the first time in 6 1/2 years to regaining full control--by March 5--of its canal. Blockaded and unused except as a bitter point of confrontation since the June 1967 war, the channel had previously served for 98 years as a crucial waterway between continents, a ribbon of commerce along which East met West. Indeed, its completion in 1869 was deemed such a historic occasion for Western Europe's mercantile ambitions that elaborate dedication ceremonies were attended by 6,000 foreign guests, including numerous monarchs. The principal cities along the 107-mile channel, Ismailia, Port Said and Suez, grew into bawdy, thriving ports.

Will Egypt reopen the Big Ditch? Though President Anwar Sadat has announced no definite plans to do so, most Egyptians are convinced that he is only too anxious to proclaim the nation's hard-won repossession of the Suez by opening it again to the world's merchant fleets. A small group of high-level Egyptian officials, with Sadat's blessing, is already hard at work on plans for a rebirth of the Suez Canal and its cities.

To dramatize his determination to rebuild right away, Minister for Reconstruction Osman Ahmed Osman, 56, is determined to be the first civilian into Suez city after the Israeli occupation ends. The boss of Arab Contractors, Egypt's largest building firm, Osman has been charged by Sadat with overseeing the reconstruction of all canal zone cities. He plans to establish headquarters in Ismailia, his birthplace and seat of the old canal company. The clearance of the canal itself will be directed by Mashour Ahmed Mashour, 55, the ex-army officer and graduate engineer who has been chairman of the Suez Canal Authority since 1965. He has set a target date for opening the canal six months from the day work starts. Those who know the tough-minded Mashour say that he will make it.

Sadat called for preliminary planning after initial Egyptian victories in the October war, and Mashour took the cue to solicit bids from salvage firms in France, Italy, Holland, West Germany and Yugoslavia. Mashour is close to signing a contract, probably with a Dutch-West German-Yugoslav consortium. The first job of the clearers will be to rid the banks of their lethal carpet of mines, and that step alone should take a month. Then divers will go into the water to pinpoint the positions and depths of wrecks. Silt, once thought to be a major barrier to reopening, will be no problem at all; very little of it has built up during the long years of disuse.*

Old Staple. While the salvage work proceeds, the Canal Authority will be restoring buoys, lights and other navigational aids. Also needed are about 13,000 workers. Most of them will probably be old canal employees, including 200 pilots who have dispersed to waterways off Kuwait, Libya, Nigeria and Hong Kong, but are anxious to return home. The entire project is expected to cost $400 million to $450 million.

Oddly enough, a reopened canal may well have less effect on the transportation of oil, its old staple, than on other materials. Israel operates a pipeline from the Mediterranean to the Gulf of Aqaba, and Egypt is about to build a pipeline from the Mediterranean to the Gulf of Suez, skimming off some of the Persian Gulf oil that used to be shipped through the Suez on tankers. Moreover, some oil company officials claim that the cheapest way of all to transport oil is in supertankers too big to run the canal. Even so, a third of the world's tanker tonnage can still fit through the Big Ditch, and for those vessels the sailing time between Persian Gulf ports and Western Europe could be cut to about 14 days from the present 30 days around the Cape of Good Hope. In addition, traders as far away as India and Pakistan would reap immediate shipping benefits from the canal's unblocking.

Beyond restoring the canal to its pre-June 1967 condition, Egypt faces a billion-dollar decision: whether or not to widen and deepen the waterway to accommodate the new larger ships, including some supertankers. The canal now can handle ships with a maximum draft of 38 ft.--70,000-ton craft carrying full loads of cargo and 140,000-tonners riding empty. An enlarged canal could take fully loaded ships with a draft of 71 ft. and a weight of 260,000 tons, or any ship now afloat empty.

Some economists in Egypt and elsewhere question spending $1 billion to $1.5 billion to enlarge a facility already made partially obsolete by the new pipelines and bigger tankers. Others predict that the "Nasser plan," calling for improvements to be carried out in two four-year stages under 40% foreign financing, will pay off with annual revenues from tolls of $600 million, compared with a pre-1967 income of $250 million a year. Egyptian officials claim that they will have no trouble raising the capital if they go ahead with the project. "We are already getting offers," says a Canal Authority executive.

Meanwhile, the repopulated canal zone cities are expected to take on their old color and bustle. Osman plans to make Port Said a free trading zone attractive to manufacturers from all over the world. Located on the Mediterranean at the mouth of the canal, Port Said offers a good climate and cheap labor (skilled factory workers make $6 a day). The government would allow raw materials to enter the zone and finished products to leave it with virtually no taxation. To the south, along the canal on Lake Timsah, Osman has dreams of building a $125 million tourist resort. "The investment could be recouped in four years," he optimistically told TIME Cairo Bureau Chief Wilton Wynn.

On the Dole. New revenues from any of these projects would help to stabilize Egypt's economy, which for years has been wheezing along with the help of a dole from oil-rich friends, principally Kuwait and Saudi Arabia, to make up for the loss of canal fees. Furthermore, State Department officials argue that Egypt's investment of funds and manpower in reopening the canal might serve as a deterrent to future fighting around it. However, the Pentagon is somewhat less enthusiastic about the project. Military strategists point out that the reopening of the canal would give Soviet naval vessels much greater maneuverability than they now have in steaming between the Indian Ocean and the Mediterranean--the very waters in which they are already putting on big shows of new strength.

*Silting is caused mainly by erosion of the canal banks as they are struck by waves from passing ships. With no traffic, there has been little erosion.

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