November 21, 2014 / 9:29 PM / 3 years ago

Egypt hires German firm to bore transport tunnels under Suez Canal

CAIRO/FRANKFURT (Reuters) - Egypt will use machines made by a German firm to bore at least four tunnels under the Suez Canal, part of an $8 billion project to expand the waterway that the government hopes will raise revenues and foreign currency reserves.

Unlisted Herrenknecht AG was discussing contract details, a spokesman for the company said on Friday, giving no details.

Kamal al-Waziri, chief of staff of the Egyptian armed forces' engineering division, had said on Thursday that the army had contracted a German company to provide machines for three car and train tunnels in Port Said, the northern outlet of the canal into the Mediterranean Sea. The tunnels are being built by Orascom Construction and other Arab contractors.

Half of the budget for expanding the canal was allocated for building six tunnels, the Suez Canal Authority said last week.

Egypt has been battered by political turmoil and violence for more than three years and the government of President Abdel Fattah al-Sisi hopes the expansion will almost triple revenues from the waterway by 2023 to $13.5 billion from $5 billion.

Sisi, the former army chief who has put infrastructure mega-projects at the top of his economic agenda, called for the new canal to be built within one year, instead of the five years recommended by international experts.

The development will run alongside the existing 145-year-old waterway - the fastest shipping route between Europe and Asia.

Reporting by Stephen Kalin in Cairo and Hans Seidenstücker in Frankfurt; Editing by Louise Ireland

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