U.S. Overpays for Suez Canal Transits

Gao ID: ID-82-19 February 10, 1982

Review of U.S. defense cooperation with Egypt has uncovered apparent inconsistencies in the tolls U.S. warships are being assessed by the Egyptian Government for transiting the Suez Canal. GAO initiated a review to examine these findings, to assess the magnitude of the overcharges, and to identify what steps can be taken to eliminate them.

Since the U.S. Embassy in Cairo began retaining records of Canal transits in 1979, overcharges have amounted to over 18 percent of the total payments. These overcharges primarily stem from inaccurate computations by the Suez Canal Authority and the absence of any verification of bills received by the U.S. Embassy. The tolls for some classes of U.S. ships which transit the Canal have been overstated, because the ships did not have Suez Canal Special Tonnage Certificates which attest to the net weight of a ship for Canal toll purposes. Sufficient controls would reduce the unnecessary expenditure of Government funds and ensure that, in the future, an objective standard is used to compute toll costs.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Harry R. Finley Team: General Accounting Office: International Division Phone: (202) 512-5187


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