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KUWAIT CITY — Gulf labour ministers Tuesday agreed on minimum terms in the contracts of domestic staff to improve the widely criticised working conditions of over 2.4 million foreign maids, an official said.  

The move comes as labour ministers of the six-nation Gulf Cooperation Council (GCC), home to 23 million foreigners, mostly unskilled workers, are to meet with their Asian counterparts in Kuwait City this week to discuss the conditions of foreign labour in the oil-rich region.

The new contract entitles domestic workers to a weekly day off, annual leave and the right to live outside their employer's house, the director general of Kuwait's Public Manpower Authority, Jamal Al Dossari, told AFP.

It also limits the working day to eight hours.

The GCC, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has repeatedly come under strong criticism by international rights groups for alleged maltreatment of foreign workers, particularly domestic helpers.

"The contract has been approved by the ministers, though some countries said they have laws that are better for workers. The ministers agreed that the contract should be the minimum granted to workers," Dossari said.

Under the contract, domestic helpers are also entitled to end of service indemnity and overtime pay for extra work for a maximum of two hours daily, in addition to banning employers from confiscating the workers' passports.

Ninety international rights and labour groups called in a joint statement Sunday for urgent action to protect migrant workers, especially maids in the Gulf.

The statement charged that millions of Asians and Africans are facing abuses including unpaid wages, confiscation of passports, physical violence and forced labour.

GCC countries have also come under fire for the "kafala" system of sponsorship which restricts most workers from moving to a new job before their contracts end unless their employers agree, trapping many workers.

Dossari said that GCC labour ministers and their counterparts from 12 Asian countries at their meeting on Wednesday-Thursday will discuss "ways to bridge the gap between the two groups and resolve problems facing workers".

India, the Philippines, Sri Lanka and Pakistan, which are the main sources of workers in the Gulf, are among the countries taking part.

WASHINGTON — The US economy grew at a much faster pace than initially thought in the third quarter, pointing to strengthening fundamentals that should help it weather slowing global demand.

The commerce department on Tuesday raised its estimate of gross domestic product (GDP) growth to a 3.9 per cent annual pace from the 3.5 per cent rate reported last month, reflecting upward revisions to business and consumer spending, as well as to inventories.

The rise in output followed a 4.6 per cent advance in the prior three months to mark the two strongest back-to-back quarters since the second half of 2003. It underscored the economy’s resilience against a backdrop of a Japanese recession, an anemic eurozone and a slowing China.

“This report will go some way in providing further confirmation about the sustainability of the current economic recovery,” said Millan Mulraine, deputy chief economist at TD Securities in New York.

Economists had expected growth would be trimmed to a 3.3 per cent pace. When measured from the income side, the economy grew at its fastest pace since the first quarter of 2012.

But the otherwise upbeat picture was marred somewhat by other data showing consumer confidence sliding to a five-month low and a further moderation in house price gains.

The ebb in consumer confidence in November was surprising given falling gasoline prices and a firming jobs market.

“Economic growth is strong and getting stronger by the day. The consumer gets it, even if they aren’t yet saying it,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

The third quarter was the fourth out of the past five that the economy has expanded above a 3.5 per cent pace, well above the level economists consider to be trend.

Some of the momentum appears to have carried over into the final three months of the year, with data from manufacturing to employment and retail sales suggesting continued strength.

But with inventories rising more than previously estimated in the third quarter, economists expect the pace of restocking to slow, holding growth below a 3 per cent pace in the fourth quarter.

Strong fundamentals

Highlighting the economy’s strong fundamentals, growth in domestic demand was raised to a 3.2 per cent pace from the previously reported 2.7 per cent rate.

“This is vindication for the Federal Reserve that they downplayed concerns overseas and it’s appropriate to speak about rate hikes next year,” said Christopher Low, chief economist at FTN Financial in New York.

The US central bank has kept benchmark borrowing costs near zero since December 2008, but is expected to start raising them around the middle of next year.

Consumer spending, which accounts for more than two-thirds of US economic activity, was revised up to a 2.2 per cent pace in the third quarter from the previously reported 1.8 per cent rate.

Business spending on equipment was raised to a 10.7 per cent rate from a 7.2 per cent. While exports grew, the pace was less brisk than previously reported, leaving trade contributing only 0.78 percentage point to GDP growth instead of 1.32 percentage points.

Growth in wages and salaries was revised lower for both the second and third quarters. Economists said that brought the GDP-based wages and salaries measures into line with earnings figures from the government’s survey of non-farm employers.

“This should ease concerns that the Federal Reserve was falling behind the curve due to mismeasured wage inflation data,” said Michael Feroli, an economist at JPMorgan in New York. 

AMMAN — Finance Minister  Umayya Toukan on Tuesday discussed with Japanese Ambassador to Jordan Shunichi Sakurai means to enhance economic and investment cooperation between the two countries.

The two sides also discussed Japan’s grants to support Jordan’s economic reform programme.

During the meeting, Toukan briefed the envoy about the financial burdens on the state budget resulting from the large number of Syrian refugees and the disruption in Egyptian gas supplies to Jordan in addition to the turbulent surroundings and their impact on investment flow to the Kingdom.

VIENNA — Impromptu talks between Saudi Arabia, fellow Organisation of Petroleum Exporting Countries (OPEC) member Venezuela and oil powers Russia and Mexico yielded no agreement on Tuesday on how to address a growing oil glut, ending without any plan to cut output despite a collapse in prices.

In a day of shuttle diplomacy before OPEC’s output meeting in Vienna on Thursday, energy officials from non-members Russia and Mexico rushed to the Austrian capital to push OPEC kingpin Saudi Arabia on the 30 per cent price fall since June.

Saudi Arabia has kept the market guessing about its response to crude’s fall amid rapidly rising US shale output, but Tuesday’s talks had led to speculation in some quarters that Riyadh might back a coordinated cut involving non-OPEC members.

Venezuelan Foreign Minister Rafael Ramirez told reporters after the talks that while all sides agreed current prices were “not good” for producing countries, no coordinated output cuts were arranged on Tuesday.

“We discussed the situation in the market, we shared our points of view, we need to keep in contact and we agreed to meet again in three months,” Ramirez, who until recently was oil minister and president of state oil company PDVSA, said.

Venezuela, a noted price hawk, would try for an output agreement within OPEC on Thursday instead, he added.

Oil prices turned lower after the talks, with international benchmark Brent falling more than $1 a barrel.

Igor Sechin, the head of Russian state oil company Rosneft  and a close ally of President Vladimir Putin, arrived in Vienna on Tuesday amid hints that Moscow could cut output or exports if the producer group did the same. Russian Energy Minister Alexander Novak also attended the four-country meeting.

“I’d like to highlight that current oil prices are not critical for us. We can postpone some capital-intensive projects,” Sechin told the meeting, according to a Rosneft statement.

“What is going to happen of course is that it [low prices] will have an impact on the global oil supply,” he said, apparently referring to a possible longer-term drop in output in countries where oil production is more expensive, including some projects in the United States.

Mexican Energy Minister Pedro Joaquin Coldwell left the meeting before the other participants, without giving a statement.

Eyes turn to Thursday 

Oil market watchers are divided on the outcome of OPEC’s Thursday meeting. Predictions range from a large production cut to revive prices, to a small reduction, or none at all.

Current prices are far below what most OPEC members and rival producers such as Russia need to balance their budgets, but the group has struggled to adapt to growing supplies from the US shale boom.

Some analysts say an OPEC cut of as much as 1.5 million barrels per day (bpd) is needed to support oil prices and avoid increasing a supply glut in the first half of 2015.

Algerian Energy Minister Youcef Yousfi told the official APS news agency on Tuesday that OPEC would seek a “consensual step” to try to bring stability to the oil market, without giving further details.

Diplomatic and market sources say Saudi officials told briefings in recent months that the kingdom, with its large currency reserves, was prepared to withstand oil prices as low as $70 — $80 per barrel for up to a year.

Saudi Oil Minister Ali Al Naimi said earlier this month that Riyadh’s desire for stable markets had not changed but gave no clue about his potential response.

Oversupply

In Vienna on Monday and Tuesday, Naimi brushed off reporters’ questions about oil prices and surplus supplies.  “This is not the first time the market is oversupplied,” he said.

Naimi did not speak to reporters after Tuesday’s meeting.

Russia’s Kommersant newspaper cited sources on Monday as saying Russia might suggest cutting its oil production by around 300,000 bpd from next year and that Moscow expected OPEC to limit its output by another 1.4 million bpd.

Moscow’s relations with OPEC were soured by the country’s pledge to cut output in tandem with the group in the early 2000s. Russia failed to follow through, and raised exports instead.

Iranian news agency Shana said Putin and Iranian President Hassan Rouhani spoke by telephone on Monday evening and agreed “on necessary cooperation in favour of oil markets”.

The agency did not say where it acquired the information. On Monday, the Kremlin said the presidents discussed Iranian nuclear talks and bilateral issues and made no mention of oil.

On Monday, Iran and six world powers agreed to yet another extension in the talks aimed at resolving a 12-year-old dispute over Tehran’s nuclear programme until June 30, 2015.

That makes any quick revival in Iran’s oil exports very unlikely and removes a potential layer of complication to this week’s OPEC meeting. 

MOSCOW — Lower oil prices and Western financial sanctions imposed over the Ukraine crisis will cost Russia around $130-140 billion a year — equivalent to around 7 per cent of its economy — Finance Minister Anton Siluanov said on Monday.

His comments are the latest acknowledgement by Russian policy makers that sanctions restricting borrowing abroad by major Russian companies are imposing heavy economic costs. But in Siluanov’s view, the fall in oil prices is the bigger worry.

“We’re losing around $40 billion a year because of geopolitical sanctions, and about $90 billion to $100 billion from oil prices falling by 30 per cent,” he told a news conference.

“The main issue that affects the budget and economy and financial system, this is the price of oil and the fall in monetary flows from the sale of energy resources,” the minister added.

Official forecasts suggest Russia’s gross domestic product is likely to be around $1.9-2 trillion this year, at average exchange rates.

Siluanov’s estimate of the cost of lower oil prices is in line with analysts’ rule of thumb that each $1 fall in the oil price lops around $3 billion off export earnings. The oil price has slumped from nearly $115 per barrel in June to around $80 now.

Oil and gas account for around two-thirds of Russia’s exports, making the balance of payments highly vulnerable to oil price falls.

Natalia Orlova, chief economist at Alfa Bank, said the $90-100 billion estimate did not take into account the effect of the weakness of the ruble, partly caused by the fall in the oil price, which would help to compensate the loss by boosting exports and curtailing imports.

The ruble has lost 25 per cent of its value against the dollar since June, and Orlova indicated that the net impact of lower oil prices on the economy would be around $40 billion.

But when it comes to the cost of sanctions, Siluanov’s estimate of $40 billion may be conservative, based on the direct cost to companies unable to borrow abroad rather than the overall impact on investor behaviour.

Other analysts have arrived at gloomier estimates, taking into account the indirect cost of sanctions and overall East-West tensions linked to Ukraine.

In its latest monetary strategy, the central bank forecast that net capital outflow this year would be $128 billion, more than double the $61 billion seen in 2013, as a result of “the events in Ukraine and the introduction of sanctions”.

Last week, influential former finance minister Alexei Kudrin said the impact of “formal and informal” sanctions on the ruble — and by implication the wider economy — was comparable to the impact of lower oil prices, and that foreign investor confidence would take 7 to 10 years to recover. 

Separately, President Vladimir Putin has allowed the central bank to administer strong medicine, sharply raising interest rates even as it freed the ruble to float.

Such tough measures may well help push the country deeper into recession next year, but have so far staved off financial panic, runaway inflation or a currency meltdown like the one that helped catapult Putin into power in the 1990s.

Those who follow the central bank say the hawkish moves are a result of Putin, known for closely managing Russia’s machinery of power, giving the bank’s technocrats free rein.

“There is ongoing criticism of the central bank and of the whole government being Putin’s lap dog,” said a high-ranked government source. “But all things considered, the central bank is now much more autonomous than it is broadly perceived.”

The high interest rates will hurt. The European Bank for Reconstruction and Development says recession is certain, predicting 0.2 per cent contraction for the full year of 2015.

Politicians have grumbled. Economy Minister Alexei Ulyukayev sent a letter to the Kremlin in the summer urging greater “cooperation” between the bank and the government, viewed as a plea for looser policy.

“There is a tension between the government and the central bank as regards growth. The effect of these stabilisation policies is going to be to deepen the recession,” said Christopher Granville, managing director of London-based consultancy Trusted Sources.

Putin himself has complained about high borrowing costs. But so far, he seems to trust the hawkish instincts at the bank.

“What the central bank is doing is in line with what the leadership wants, in a strategic way,” said Granville. “Stability is the absolute top priority, rather than avoiding negative growth at all costs.”

Still, there is always a chance that Putin can change his approach. Remarks he made on Tuesday hinted as much. Speaking to Siluanov, he called for “teamwork between the central bank and the government”.

Obsession 

Exchange rates are an obsession for Russians since the 1990s, when hyperinflation after the fall of the Soviet Union wiped out the financial system, destroyed savings and brought the economy to its knees.

A second currency collapse and default in 1998 propelled Putin into power the following year, and a stable ruble has been one of the most prized achievements of his rule ever since.

Putin himself makes much of the central bank’s independence.

“We — from the executive power level — do not meddle in the policy of the central bank,” he said this month when meeting International Monetary Fund (IMF) head Christine Lagarde. “The central bank, in accordance with the law, conducts an independent policy. But of course we look carefully at what is happening.”

In an e-mailed comment, the bank said its independence, “one of the fundamental principles in understanding of monetary policy”, was enshrined in the constitution.

Some of Putin’s critics say he keeps out of monetary policy because he feels insecure about an area outside his expertise.

“The central bank of Russia is the most independent institution in modern Russia,” said Sergei Aleksashenko, a former deputy central bank governor and critic of the president.

“That originates from Mr Putin’s inability to understand how monetary authorities operate. He understands the importance and influence of the central bank but is afraid to influence it in a strong manner,” he added.

Geeks in glasses 

Unlike at some ministries and top companies, the bank’s management does not include any of Putin’s powerful old friends.

“It’s just a bunch of glasses-wearing geeks; you can argue more or less competent, but geeks,” said the high-ranked government source.

Putin has put his trust in the bank’s governor Elvira Nabiullina, 51, at the bank’s helm for 17 months after serving Putin for years as economic adviser and Cabinet minister.

“She has turned out to be stronger than expected as the central bank governor,” said Anders Aslund, senior fellow at the Peterson Institute for International Economics in Washington.

Nabiullina, in turn, has put monetary policy in the hands of Ksenia Yudayeva, a US trained economist regarded as one of the brightest in the country.

The ruble stability of the Putin years has been underwritten by vast currency reserves earned from selling oil and gas. But when oil prices fell and sanctions were imposed over the Ukraine crisis this year, even Russia’s $420 billion war chest showed its limits.

After spending $30 billion supporting the currency in a single month, Nabiullina brought forward long-awaited plans to float the ruble, abandoning efforts to keep the exchange rate within an official band.

On the morning of November 10, when it was announced, even the heads of the bank’s departments were taken by surprise, sources said, emphasising Nabiullina’s ability to prevent leaks.

Before she cut the ruble loose, Nabiullina sharply hiked interest rates to ensure that savers would hold rubles and prevent a panicked flight, like the one that hit in 1998.

The ruble is still some 29 per cent down against the dollar, but has rallied in recent days. Earlier this week, Nabiullina stoically defended the decision to float the currency.

“It is absolutely impossible to control the exchange rate... in the current economic conditions that the Russian economy is now in, by keeping its dependency on the price of oil,” she told lawmakers in parliament.

AMMAN — Prime Minister Abdullah Ensour on Monday urged bankers, experts and financiers to give greater attention to small- and medium-sized enterprises (SMEs). 

Inaugurating a conference on SME financing and loan guarantee programmes, the prime minister told the participants that the SMEs sector still gets a modest share of financing .

The conference is organised by the Jordan Loan Guarantee Corporation (JLGC) marking the 20th anniversary of its establishment.

During the inauguration ceremony, Ensour stressed the importance of the conference, which is synchronised with the government's work on preparing a 10-year economic plan expected to be ready before the end of the year, especially that the government is aware of the importance of these projects. 

He said the government has a comprehensive framework to support these projects as part of its economic programme and plan. 

A higher committee was formed to support these projects, headed by the minister of planning and international cooperation and the membership of relevant ministers and institution directors, according to a JLGC statement.

This committee is tasked with making a strategy that streamline efforts, facilitates procedures and supports participants in the sector, in addition to considering the incentive structure presented to this vital sector. 

The premier said the government is interested in providing different local and international finance sources for these projects on easy terms that enable them to expand and enhance their competitiveness.

Ensour also affirmed the government’s commitment to supporting this sector for its economic and social role in light of current circumstances in the Kingdom. 

He added that this vision focuses on employment and providing productive jobs through training, rehabilitation and empowerment as a base to contain unemployment and fighting poverty. 

The challenge in this context, the prime minister continued, is to coordinate all efforts to execute supporting programmes and develop small- and medium-sized projects in joint efforts between the public and private sectors. 

Central Bank of Jordan (CBJ) Governor Ziad Fariz said JLGC was established in 1994 under a CBJ initiative, and it has been able to perform its responsibilities and achieve its goals efficiently. 

Fariz said the CBJ has offered finance programmes to industry, tourism and renewable energy sectors at preferential interest rates and with financing up to 5 per cent of the loan portfolio at each operating bank.

CBJ has recently developed loan terms within this programme to accommodate with financing programmes applied in Islamic banks in the Kingdom, Fariz added, noting that CBJ also seeks to provide special credit lines for small- and medium-sized projects through all banks in the Kingdom.

Jordan has managed to get an easy loan of $70 million from the World Bank and a credit line of $50 million with similar conditions from the Arab Fund for Economic and Social Development followed by a $150 million from the same fund due to the success of the banking sector in utilising these amounts for such projects. 

Work is under way to finish final reference conditions for a special loan from the European Bank for Reconstruction and Development (EBRD) worth $150 million for the same purpose, Fariz said.

Nimeh Sabbagh, chief executive officer of Arab Bank which provided exclusive support for the conference, underlined in a speech the importance of the pivotal role of the banking sector in creating job opportunities and developing the economy.

Sabbagh noted that statistics show that Arab economies need to create jobs for around 25 million youths expected to need jobs during the next 10 years.

To create these jobs, Sabbagh said, Arab countries have to double their already low growth rates which stand below 3 per cent.

JLGC General Manager Mohammad Jaafari said the two-day conference hosts international experts to intensify knowledge exchange on loan guarantee industry in the Middle East and North Africa region.

Jaafari added that guarantee companies from Morocco, Tunisia, Egypt, Iraq, Lebanon, Turkey, Malaysia, Algeria, Oman, Kosovo and France are participating in the event.

Experts representing the World Bank, International Finance Corporation, EBRD and USAID are also participating in the conference.

AMMAN — The national economy is on the right track, with plans and programmes under implementation by the government achieving positive results at several levels, Industry, Trade and Supply Minister Hatem Halawani said Sunday.

At a meeting with members of the Amman Chamber of Commerce (ACC) board of directors, Halawani underlined the importance of the achievements in light of huge challenges the Kingdom is facing due to surrounding regional circumstances and the continuous increase of the energy bill, which consequently raised the debt burden.

Referring to economic indicators released by the Central Bank of Jordan, he cited credit economic reforms that helped to achieve a 3 per cent growth rate during the first half of 2014, and raise national exports by 7 per cent during the first eight months of the year.  

The minister indicated a ministry statement, e-mailed to The Jordan Times, that the Kingdom’s foreign currency reserves achieved unprecedented levels reaching $14.3 billion until the end of the third quarter of 2014, registering a 19.3 per cent increase, compared to the same period in 2013.

Inflation rate dropped to 3.1 per cent during the first nine months of the year, compared with 6.1 per cent in the same period of 2013, in addition to the decline in unemployment rate to 11.4 per cent, Halawani said.

He added that the energy bill still places a huge burden on the Jordanian economy, noting that the government support to the electricity bill stands at JD1.4 billion annually.

The losses of the National Electric Power Company (NEPCO) has exceeded JD5 billion so far, Halawani indicated, noting that the electricity charges for the majority of citizens were not affected since their monthly consumption does not go beyond JD50, a consumption rate that benefits from government support. 

The minister stressed the government’s keenness  on real and effective partnership with the private sector, in a way that positively affects the national economy and contributes to solving all problems faced by various economic sectors.

He also added that the 10-year economic plan, which the government is currently working on under Royal directives, partly focuses on enhancing the competitiveness of the commercial and industrial sectors and intensifying investments based on real partnership.

ACC President Issa Murad and other ACC members spoke about some problems facing the commercial sector, such as the recent strike of workers at the Aqaba Container Terminal  and the high cost of handling.

Murad requested a follow up to cancel the 1 per cent customs services fees on some exempted imports, and to resolve some exceptions on imports from some countries stressing the importance of cooperation to speed up the work on the specifications law. 

AMMAN – Jordan's exports of fruits and vegetables are picking up despite instability in neighbouring Iraq and Syria which once were key importers of the Kingdom's agriculture produce. 

According to official foreign trade figures released Sunday by the Department of Statistics (DoS), the value of fruit and vegetable exports during the first three quarters of this year went up by over 20 per cent to JD410 million from JD340 million during the same period of last year. 

In September alone, agriculture produce exports surged by 85.5 per cent to JD61.6 million from JD33 million when compared with the same month of last year, the DoS report pointed out. 

Jordan is currently a major supplier of fruits and vegetables to the Gulf Arab market, particularly Saudi Arabia and the United Arab Emirates. Syria and Iraq used to import nearly two thirds of production but exports to these markets dropped tangibly due to several years of turmoil there. 

The DoS report also showed that the Kingdom's energy bill increased by 13.9 per cent in the January-September period of this year as the value of imports of crude oil and its derivatives went up to JD3.3 billion compared to JD2.9 billion during the same period last year. 

The DoS report also showed that the Kingdom’s trade deficit, the value imports exceeding those of exports,  increased by 1.9 per cent during the January-September period of this year to JD7.6 billion at current prices compared with JD7.5 billion recorded during the same period of 2013.
The DoS noted that the coverage ratio of total exports to imports has increased to 36.9 per cent from 35.8 per cent.

The Kingdom’s exports during the first nine months of the year went up by 8.6 per cent to JD3.88 billion from JD3.57 billion during the same period of 2013, while imports increased by 3.7 per cent from JD11.6 billion to JD12.1 billion, according to the statistics.

AMMAN — A conference on financing small- and medium-sized projects and the role of loan guarantee programmes will be launched on Monday under the patronage of Prime Minister Abdullah Ensour.

The two-day conference will discuss the economic and social roles of small- and medium-sized projects and financial challenges facing these projects, among other issues.

Participants in the conference include World Bank experts, International Finance Corporation, the European Bank for Reconstruction and Development and the USAID, in addition to other supporting international bodies. The conference is synchronised with the 20th anniversary of establishing the Jordan Loan Guarantee Corporation, which was founded by an initiative of the Central Bank of Jordan. The Arab Bank has fully supported arranging the conference.

CAIRO — Egypt will offer a slew of projects to domestic and foreign investors at a conference in March aimed at kick-starting an economy battered by years of political unrest, the prime minister said Saturday.

Falling tourist revenues and slowing investments have left Egypt's economy in ruins after nearly four years of turmoil that saw two presidents ousted following mass street protests.

But President Abdel Fattah Al Sisi has put economic recovery at the top of his agenda, and the March 13-15 conference in the resort town of Sharm Al Sheikh will highlight a series of projects for which investment is wanted.

The premier, Ibrahim Mahlab, told reporters in Cairo the gathering will be the "cornerstone for Egypt's economic revival and aims to provide the resources used... to improve health care services, the educational system and provide energy to all".

Among them, he mentioned at least 10 projects in energy and river transport, but did not elaborate.

Mahlab said the conference is a message to the world that "Egypt needs a strong economy that can stabilise the whole region”.

"Our economy is about to recover... All the economic indicators point to this... and this conference is to support the Egyptian economy," he added.

In August, Sisi launched the construction of a $4 billion (3.2 billion euro) expansion of the Suez Canal that aims to speed up traffic and foresees the creation of one million jobs.

Sisi has set an ambitious target of digging the new canal in one year, which will run parallel to the original one, built 145 years ago.

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 earlier this month.

The government of President 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.