Saudi canal plans signal Qatar crisis still raging

In a region well known for building the tallest skyscrapers, the grandest harbors and the biggest airports, it can take a lot for a construction project to grab world headlines. Yet that is exactly what the Salwa Marine Canal has done recently – even if for reasons other than engineering mastery.

The proposed canal would run through Saudi territory across the entire base of the Qatar Peninsula, officially creating a new sea lane and providing opportunities for tourism.

Yet by physically slicing Qatar off from the coast of Arabia, the canal would also create a 60-kilometer-long, 200-meter-wide symbol of the now 14-month old Gulf Crisis.

This dispute has pitted Qatar against its Gulf Cooperation Council (GCC) partners Saudi Arabia, the United Arab Emirates and Bahrain – along with Egypt – and seems no closer to a solution than it was back in May 2017.

Indeed, when Saudi Arabia recently announced that its plans for the canal were moving forward, this was likely an important reminder that the dispute is still very much alive.

“It’s a signal from Riyadh to say that the crisis isn’t over, despite the year that’s gone by,” said Dr Courtney Freer, Research Officer at the London School of Economics’ Middle East Center. “It’s a way of solidifying the rift, of showing they are even willing to saw off a GCC member state – and they know no one will stop them.”

Engineering works

News of the canal first came out in April, when Saudi state media gave its dimensions and said it would cost around 2.8 billion riyals (US$750 million) to complete.

By comparison, the recent 72km Suez Canal extension cost some $8 billion, while the proposed 45-50km Istanbul Canal, linking the Black Sea and Marmara Sea, would cost some $10 billion, according to Turkish President Recep Tayyip Erdogan.

The Salwa Canal would follow a route through low-lying desert and salt flats known as sabkha, connecting the eastern and western waters of the Persian Gulf, south of the Qatari-Saudi frontier.

Either side of this route, a canal zone would be established, with both sides lying within Saudi territory. This would give Riyadh complete control over the canal’s use.

In that zone, new industries would also be founded. These would include tourism – with ideas for hotels and marinas along the waterfront – and also, rather incongruously, nuclear waste disposal.

Saudi Arabia is moving ahead with plans to build two large nuclear reactors on the Gulf coast, with the successful bidders for these to be announced next year. Waste from these, Saudi state media suggested in April, could be disposed of next to the Qatari frontier.

The zone would also include military facilities, with Saudi army bases proposed for the northern bank of the channel.

The canal, which Saudi news media suggested could be completed within a year, would also be a working sea lane. Advocates in the Saudi and Emirati press have declared that it would shorten maritime routes for traffic heading to ports further up the Gulf, while also boosting trade with Saudi ports in its Eastern Province, such as Dammam.

Yet with the distance between Dammam and the Gulf maritime hub of Jebel Ali in Dubai some 389 nautical miles – a route that goes over the top of the Qatar Peninsula – a diversion south to the proposed canal entrance at the base of the peninsula might, in fact, add to the journey time.

Nonetheless, after April’s announcement, a deadline of June 25 was set for submission of bids for the project, with subsequent media reports stating that five international companies with expertise in such schemes had taken part in the tendering.

The winner was to be announced within 90 days, although on June 18, Saudi royal court adviser Saud al-Qahtani had already retweeted a video with the caption, “Starting the Salwa canal. Congratulations to the Saudi people for this wonderful project that will transform the small terrorist state of Qatar into an island.”

As for the project financing, the official announcements have suggested this will be done entirely by private Saudi and Emirati investors.

Yet “the cost is a problem,” adds Freer. “Saying that the private sector will pay all of it is probably because the Saudi state couldn’t justify paying for it itself, but I think this isn’t realistic.”

Indeed, private investors and financiers may well balk at the idea of the canal unless there are major state guarantees and subsidies.

Political channels

The project’s fate may well depend, then, on political decisions, rather than economic realities.

These, in turn, will likely depend on the current Gulf crisis, which has entered its second year without much sign of an impending resolution.

The dispute began in May 2017 with Qatar being accused by the Saudis, Emiratis, Bahrainis and Egyptians – the “Arab Quartet” – of supporting terrorism and promoting instability, while also being too close to Iran.

A list of 13 demands was issued by the Quartet that included closing the Qatar-based TV channel Al Jazeera, shutting Turkish military facilities in the state, handing over a list of individuals wanted by the Quartet states, and breaking ties with Iran.

Qatar rejected the accusations leveled against it and has so far refused to meet any of the demands.

A blockade was then imposed by the Quartet, with the land border with Saudi Arabia closed and Quartet airspace closed to Qatari planes.

The dispute has separated families and hit many businesses, yet it has also strengthened support within Qatar for its leader, the emir, Sheikh Tamim bin Hamad Al Thani.

Meanwhile, the country’s Turkish and Iranian ties have strengthened. Qatar has also largely weathered the economic storm created by the crisis, with international credit-rating agency Moody’s upgrading the country’s long-term outlook from “negative” to “stable.”

Throughout, fellow GCC state Kuwait has been attempting to mediate, while the US and European Union have also called for a resolution. Yet no concerted diplomatic effort has been made by either since former US secretary of state Rex Tillerson visited the region last October.

Back in 2014, a similar dispute blew up between Qatar and the Saudis and Emiratis, which lasted nine months. This time, however, efforts to find a way out may be in much greater difficulty.

“This time, the dispute has been much more public than in 2014, which makes it much more difficult for anyone to step back,” Freer said.

If the Salwa Canal becomes a reality, too, it will also be difficult for either side to step across.