Egypt’s Terms For Running Canal

Press, Volume XCV, Issue 28261, 26 April 1957, Page 11

Egypt’s Terms For Running Canal

(N.Z. Press Association—Copyright) (Rec. 8 p.m.) CAIRO, April 24. Egypt tonight reiterated its right to run the nationalised Suez Canal on its own terms and, according to observers, virtually rejected all idea of international control. The Government published a policy statement on canal operations which it has sent to the United Nations Secretary-General, Mr Hammarskjold, who initiated negotiations on the future of the canal. This disclosed that the Egyptian Canal Authority set up last July to run the canal would pay the Government 5 per cent, of its revenue a year as royalty. A further 25 per cent, would be set aside for a special capital and improvements fund to pay for canal improvements and to meet costs involved in discharging the obligations which the authority assumed on taking over.

In New York, the Security Council will meet in urgent session in the next 48 hours to discuss the Egyptian statement. The Western Powers hope to persuade President Nasser to adopt a policy more in line with the Security Council’s “six requirements’’ for a canal settlement. The Egyptian statement published today omitted reference to the chief of these requirements—that the canal be insulated from the politics of any country. Cairo Radio tonight broadcast the Egyptian statement, pledging observance of the 1888 Convention on the operation of the Suez Canal. The statement said the Egyptian Government undertook not to increase canal tolls more than 1 per cent, for 12 months without negotiations. The Government statement accompanied a letter sent by the Foreign Minister, Dr. Mahmoud Fawzi, to Mr Hammarskjold, the radio said. The letter officially announced that the canal was now open for navigation. The statement said that Egypt welcomed co-operation between the Canal Authority and international navigation organisations, provided that canal dues were paid to the Canal Authority through an appointed Egyptian bank. The statement stipulated that complaints should be lodged with the Canal Authority. Procedure on Dispute Disputes would be resolved by a committee including representatives of the complainant, the canal authority, and two other arbitrators selected by the two sides. In his letter to Mr Hammarskjold, Dr. Fawzi drew the Sec-retary-General’s attention to the fact that the statement was an international document and should be recorded at the United Nations. The Foreign Minister’s letter said the independent Suez Canal Authority set up by Egypt last July “shall administer the canal.” If tolls should increase during the 12 months, the increase should not exceed 1 per cent. Larger increases should be made through negotiations. Egypt promised to maintain and develop the canal in accordance with the needs of modern shipping. The first American cargo ship to use the reopened Suez Canal, the 9277-ton President Jackson, led a convoy of four north-bound ships through today, carrying general cargo from Karachi to San Francisco. She paid the toll in dollars equivalent to about £3588 to the Egyptian Canal Authority, but lodged a letter of reservation in case of future litigation over tolls, the ship’s Cairo agents said. The ship is owned by the American President Lines. She has 12 passengers aboard.