Tags: Nicaragua | Plans | New | Canal | Rival | Panama

Nicaragua Plans New Canal to Rival Panama

Saturday, 30 September 2006 12:00 AM

A late 19th century idea has been resurrected to build a new canal in Nicaragua, at the same time Panama is planning to widen its own canal.

Nicaraguan officials say next week they will announce their $20 billion proposal to build a canal linking the Pacific and the Atlantic oceans that would accommodate ships too large to use the Panama Canal, according to the Los Angeles Times.

If it meets with the necessary approval by Nicaragua's Congress, the project would be a joint public-private venture financed by unnamed investors, Lindolfo Monjarretz, a spokesman for Nicaraguan President Enrique Bolanos, told the Times.

"We will have a deeper draft than the Panama Canal and reach a different market than Panama," Monjarretz told the Times. "The construction of the canal . . . will be pushed forward by Nicaragua because it's necessary for global trade."

That contention was disputed by Rodolfo Sabonge, a top official of the Panama Canal Authority, the quasi-independent body that has run the canal since the United States turned it over to Panama in 1999. Sabonge told the Times that there was insufficient ship traffic to support both a widened Panama Canal and a second canal in Nicaragua.

"If the Panama referendum passes and the widening goes forward, [the Nicaraguan project] is not feasible," Sabonge said. "Our analysis shows that if our project is approved, there would not be enough demand to pay for the two, and they would have to have a cost structure much higher than ours."

The Times added that recent polls show nearly two-thirds of Panamanian voters favor expanding the canal. If approved, the project calls for work to begin next year, with completion expected in 2014.

Experts predict that the century-old Panama Canal will soon reach the limit of its capacity. They say the canal, which opened in 1914, cannot accommodate vessels that are more than 106 feet wide and 965 feet long. Moreover, ships seeking to use the Panama Canal are now required to reserve passage through the waterway up to several months in advance. Those without a reservation can be forced to wait as long as four days for an open slot to cross from the Pacific to the Caribbean.

In recognition of that fact, Panamanians will vote on a referendum Oct. 22 to expand their country's facilities. The proposed $5.25 billion upgrade would allow vessels with double the current tonnage to use the 50-mile-long waterway.

The proposed Nicaragua Canal would make use of the 60-mile-wide Lake Nicaragua and follow at least part of a route first proposed by American and European entrepreneurs in the 19th century, officials told the Times.

Nicaragua was first considered for a canal in the late 19th century because it offered cheaper transportation than Panama, a healthier climate and even abundant provisions according to a study by American University. The study noted that reports dated from 1852 and 1876, demonstrated beyond any doubt the superiority of the Nicaragua route.

During the 1800s, Nicaragua's relations with the U.S. revolved around the prospects of construction of a canal through Nicaragua. In 1884 an agreement was concluded, expanding previous arrangements in the area. The United States was to construct a canal that would be owned jointly with Nicaragua. Nicaragua ratified this treaty, but the United States did not. President Chester A. Arthur withdrew it from Senate consideration in 1885.

Nicaraguan President Bolanos said his government had been studying a canal proposal for "six or seven years," and added that Nicaragua's canal would take a decade to build and when completed would be more modern than Panama's.

"We know that for every 100 ships that come to the Americas, only seven use the Panama Canal," he said. "There's a lot of business to share."

If a Nicaraguan canal were built, "it would bring an economic effervescence never seen before in Central America," Bolanos said.

The two proposed canal projects are not the only proposals in the works. According to the Times private investors are behind at least two other so-called dry-canal projects across Nicaragua and neighboring Honduras that would include new highway and rail links connecting expanded Pacific and Caribbean ports on either side of the isthmus.

Speaking of the Nicaraguan project, Geraldine Knatz, executive director of the Port of Los Angeles, told the Times: "Obviously they are trying to compete with the Panama big locks project . . ."

"But Panama has spent years studying this project, looking at the economics and doing the engineering," Knatz added. "This is not something you just decide on overnight . . . It would be a big catch-up for Nicaragua to step in and do this."

Knatz added that she favored an expanded Panama Canal.

"I can look out ahead to a time when the West Coast is not going to be able to handle all of the volume," Knatz said, noting that the Port of Los Angeles, the nation's busiest container facility, would reach capacity between 2020 and 2025.


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A late 19th century idea has been resurrected to build a newcanal inNicaragua, at the same time Panama is planning to widen its own canal. Nicaraguan officials say next week they will announce their $20 billion proposal to build a canal linking the Pacific and the...
Saturday, 30 September 2006 12:00 AM
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