Egypt plans to build a new Suez Canal alongside the existing 145-year-old historic waterway in a multi-billion dollar project aimed at expanding trade along the fastest shipping route between Europe and Asia.

The Suez Canal earns Egypt about $5 billion a year in revenues, a vital source of hard currency for a country that has suffered a slump in tourism and foreign investment since its 2011 uprising.

The new channel, part of a larger project to expand Suez port and shipping facilities, aims to raise Egypt’s international profile and establish it as a major trade hub.

“This giant project will be the creation of a new Suez Canal parallel to the current channel of a total length of 72 kilometres,” Mohab Mamish, chairman of the Suez Canal Authority, told a conference in Ismailia, a port town on the Canal. His comments were broadcast by State television.

Up to 20 Egyptian firms could be involved in the project but would work under military supervision

He said the total estimated cost of drilling the new channel would be about $4 billion and be completed in five years, though Egypt will strive to finish it within a more ambitious three-year deadline.

The original canal, which links the Mediterranean and Red Seas, took 10 years of intense and generally poorly-paid work by Egyptians, who according to the Canal Authority, were drafted at the rate of 20,000 every 10 months from “the peasantry”.

It took weeks, if not months, of journeys between Europe and Asia, otherwise necessitating a trip round the tip of Africa.

Egyptian President Adel Fattah al-Sisi, a former army chief, said the armed forces would be in charge of the new project for security reasons. Up to 20 Egyptian firms could be involved in the project but would work under military supervision, he said.

Last year, Sisi orchestrated the ouster of elected Islamist president Mohamed Mursi and oversaw a massive crackdown on Mursi’s Muslim Brotherhood.

This was followed by a rise in violence from Islamist militants based in the Sinai Peninsula, which has stoked some concern about the security of the nearby Suez Canal. The government has since been fighting militants in an ongoing military campaign in which hundreds have died on both sides.

Any disruption to shipping along the canal tends to have a serious impact on trade and oil prices.

“Sinai to a large degree has a sensitive status. The army is responsible to Egypt for this,” said Sisi, who has previously said he would not hesitate to award major projects to help revive Egypt’s battered economy to the army.

Sisi’s allies and supporters have likened him to Gamal Abdel Nasser, the charismatic colonel who led a coup against the monarchy in 1952, set up an army-led autocracy and rounded up thousands of Muslim Brothers.

In 1956, Nasser nationalised the Suez Canal, leading to a failed invasion by Britain, which controlled the channel, as well as France and Israel. Nasser was praised by Egyptians for pursuing several big projects during his 14 years as president.

Pro-government Egyptian media did not hesitate to compare the Suez expansion plans to Nasser’s own State-led infrastructure projects that were a source of national pride.

Egypt has planned for years to develop 76,000 square kilometres around the canal to attract more ships and generate more income.

Sisi said the new canal was an unannounced part of that project, which Egypt invited 14 consortia to bid for in January. Reuters reported that Egypt had chosen a consortium including global engineering firm Dar al-Handasah, as well as the Egyptian army, to develop the area.

A promotional video played at the launch event suggested the project would cut waiting times for vessels and allow ships to pass each other on the canal.

Mamish, the chairman, said the project would involve 35km of “dry digging” and 37km would be “expansion and deepening”, indicating the current Suez Canal, which is 163km long, could be widened as part of the project.

Gulf allies Saudi Arabia, the United Arab Emirates and Kuwait donated more than $12 billion in cash and petroleum products to Egypt after the army overthrew Mursi. But Egypt remains in dire need of longer-term investments.