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By Charlene Gubash

Egyptians cheered on Thursday as their president unveiled a major extension of the Suez Canal aimed at resurrecting the country's flagging economy but which has been dogged by doubts over its prospects.

The canal has long been a symbol of national pride, and Thursday's event underscored the high hopes riding on the estimated $8.5 billion project.

Egypt's government declared Thursday a national holiday. President Abdel-Fattah al-Sisi — the project's biggest defender and driving force — sailed down the canal on a yacht flanked by navy warships to an event with high-profile foreign dignitaries. A military fly-by also heralded the occasion.

Samah Imam, 41, was among the hundreds braving 101-degree temperatures in Cairo's Tahrir Square to celebrate the extension and its ceremonies which were carried on state TV.

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"This is a proud moment for Egypt," she told NBC News. "All of Egypt contributed to make it. The canal will create more jobs and improve the Suez region."

Samah Imam celebrated Egypt's Suez Canal expansion in Tahrir Square in Cairo on Thursday.Charlene Gubash

Rafaa Salem brought his four-year-old son Ruman to the square to mark the day.

"The canal is beautiful," he said, as Egyptian flags waved around him. "It is an artery for the whole country."

The project — which was financed by Egyptian taxpayers — includes a 22-mile parallel waterway flanking the existing 145-year-old one, plus a deepening and widening of the existing canal.

Egypt's economy has been crippled by unrest in wake of the 2011 uprising that ousted President Hosni Mubarak.

Sisi — who was elected in 2014 — has long boasted of the extension's economic prospects, ordering the project to be completed in one year rather than the initially estimated three.

Egyptians dance in tahrir square to celebrate canal opening.Charlene Gubash

The government says the expansion will more than double the canal's annual revenue to $13.2 billion by 2023, according to The Associated Press. However, economists and shippers have cast doubt on whether the project will pay off.

Ahmed Kamaly, an economist with the American University in Cairo, told Reuters the government projections were "wishful thinking."

"There was no viability study done, or known of, to assess the viability of the project," he said.

The Suez Canal — built between 1859 and 1869 — is one of the world’s busiest waterways, linking the Mediterranean Sea to the Red Sea and allowing ships to skip sailing around the continent of Africa.

It became an icon of independence when then-President Gamal Abdul Nasser nationalized the waterway in 1956, sparking an invasion of Egypt by the U.K., France and Israel. When those three nations were ordered to withdraw by the U.S. and then-Soviet Union, it was interpreted as a resounding victory for Abdul Nasser.

The Associated Press and Reuters contributed.