2 Necessity of the Project
2.1 World Necessity
Because of requirements of the new IMO, MARPOL, a great number of existing single hull tanker with the age of over 25 years shall be prohibited to operate after July 1995 without appropriate modification either to convert into double hull stucture or to install the effective prevention system agaist outflow of oil. Many ships therefore such as VLCCs built in 1970's shall be demolished, and this demand of ship breaking could be accelerated toward around 2000. In order to laying up increasing number of these aged single hull tankers and to recycle effectively by ship's materials, the development and improvement of the ship-breaking industry are definitely required on the world wide level.
In spite of the strong demand for ship breaking of aged tanker, the world ship breaking capacity would be falling down according to the Japanese Maritime newspaper dated 2nd March 1998. The reason for the fall of world capacity is due to the drop by India and China. Therefore the increase of shipbreaking capacity in the world seems essential toward 2002 to 2005, at which the potential old ships would be scrapped around that time.
2.2 Necessity of the Project for Suez Canal Authority
Economy of Egypt has changed for the better in 1990's due to the increase of oil export, toll of Suez Canal and increase of tourism. In spite of economic growth, a disparity in wealth had become larger and the unemployment rate is around 10%. Therefore, it is crucial for the government to provide a job to the people so as to stabilize the country.
Since the ship breaking project needs a big labor force of nearly 1000, the Project is one of the most appropriate for the developing country such as Egypt so as to provide a stable job to the people.
Moreover, Egypt has started the redevelopment of the country and the steel demand is very strong. The scrapped material from the ship could be re-used for complement of the shortage of steel demand.
2.3 Demand of Ship Scrapping
2.3.1 Change in numiber of merchant vessels, its price and scrapped number
Tab.2.3.1 shows the trend of volume and price of ship scrapped. According to the table, it is realized that a yearly average of ship scrapped in 1970's was 5.5 million GT. There was a big raise up to 12.3 million GT, especially 22.23 million GT and 2360 ships in 1985.