Saudi Arabia offers to buy part of Sharm El Sheikh from Egypt

By Cherie Beling

The post appeared first on: Visit divemagazine.com
Author: Mark ‘Crowley’ Russell

Overlooking Tiran Island Sharm El Sheikh, Egypt (Photo: Shutterstock)

Saudia Arabia has made an offer to the Egyptian government to purchase Ras Ghamila, part of the popular Red Sea resort of Sharm El Sheikh, according to recent reports.

Ras Ghamila, which lies at the northern end of Sharm El Sheikh, is one of the resort town’s more upmarket locations, around 15km north of the central district surrounding Na’ama Bay. The local reefs are considered some of the most beautiful of Sharm’s fringing coral reef, and recently made headlines as the site of a Libyan-flagged LPG tanker stranding.

According to a government source who spoke to the Middle East Eye, the deal will be financed in part by Saudi funds already deposited in Egyptian banks, reportedly worth US$10.3 billion. Earlier speculation over a deal had been denied by the Egyptian government, however, observers point to a $35 billion agreement signed with the United Arab Emirates in February to develop the Mediterranean peninsula of Ras El Hekma into a tourist resort.

Ras Ghamila is home to some of Sharm’s higher-end hotels (Photo: Shutterstock)

The sale of land to foreign investors is a response to Egypt’s mounting economic crisis. Since the January Revolution of 2011, when the military overthrew the govenment of Hosni Mubarak, Egypt’s national debt has more than quadrupled. Consumer inflation under the current incumbent, Abdel Fattah El-Sisi, has averaged around 12 per cent over the subsequent decade, but has rocketed in the last two years, reaching a record 36 per cent in Februrary 2024.

The flotation of the nation’s currency in October 2022 as part of a deal to secure an US$8 billion IMF loan further compounded the country’s economic woes, as the value of the Egyptian Pound devalued by more than 50 per cent virtually overnight, and now stands 18 months later at LE51 to €1, from around LE17 to €1 in September 2022.

The suddent devaluation caused a crisis among Egyptian owned dive businesses, who were forced to ask their customers to bring Euros, Pounds Sterling and Dollars to pay for their holidays.

Saudi Arabia has long had its eye on expanding its connection to Egypt. Ownership of the contested island of Tiran, which lies directly opposite Ras Ghamila, was ceded to Saudi Arabia in 2017, after decades of Egyptian administration.

Saudi Arabia’s plans for its Neom megacity put Sharm just a few kilometres away

Saudi also announced plans in 2016 to build a bridge across the Straits of Tiran, the Egyptian end of which would likely terminate between Ras Ghamila and Nabq, just a few kilometres to the north, and close to Sharm El Sheikh International Airport.

Construction of the bridge would be devastating for Sharm’s reefs, especially the Straits of Tiran National Park reefs of Gordon, Thomas, Woodhouse and Jackson, but much of Sharm’s fringing reef and the world famous reefs of Ras Mohammed National Park, some 30-40km further south, would undoubtedly be severely affected.

While the plans for the bridge seemed to have been indefinitely placed on hold, news that Saudi Arabia is planning to invest in Sharm – potentially as part of its Neom Red Sea megacity project – will undoubtedly raise concerns that construction of the bridge may be reconsidered.

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