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Nicaragua Hopes to Rival Panama Canal

Price of Central American Ambition: $ 25bn and 10 Years' Construction

RUPERT WIDDICOMBE / Guardian Weekly (UK) 23oct03

 

Map of Central America: Nicaragua Hopes to Rival Panama Canal: Price of Central American Ambition: $ 25bn and 10 Years' Construction RUPERT WIDDICOMBE / Guardian Weekly (UK) 23oct03

Managua—Multi-billion dollar plans to create a rival to the 90-year-old Panama canal by linking a network of rivers and cutting through the jungle of Central America are being backed by the government of Nicaragua.

The new waterway being proposed by a public private partnership called the Grand Canal Foundation - will cost an estimated $25bn and take 10 years to build. Its proponents say it would turn Nicaragua into the wealthiest nation in Central America within 20 years.

There would be work for 40,000 people during construction, plus the creation of 20,000 permanent operational jobs. A further 120,000 jobs would be indirectly created in tourism and port services.

The canal would be wide and deep enough-to handle a new generation of "post-Panamax" container ships that are too big to fit through the Panama canal's locks. And it would put an end to delays of days or even weeks as ships await passage.

"The Great Canal has been a dream for Nicaragua' for many decades," said President Enrique Bolaños, who lent army helicopters to a commercial Chinese delegation to fly over the proposed route.

The idea of a-canal in Nicaragua is not new. The early Spanish colonists received a royal order to carry out what would now be called a feasibility study for developing the established trade route between the San Juan river and Lake Nicaragua.

In the 1800s the US became the leading advocate for an inter-ocean link, reaching an agreement with Nicaragua for a jointly owned canal in 1884.

Map of Central America: Nicaragua Hopes to Rival Panama Canal: Price of Central American Ambition: $ 25bn and 10 Years' Construction RUPERT WIDDICOMBE / Guardian Weekly (UK) 23oct03

But in 1902 Nicaragua was pipped at the post by Panama. On the eve of the vote in the US Senate, the pro-Panama lobby sent every senator a Nicaraguan postage stamp showing the Momotombo volcano in full eruption. Even though the volcano was 150km from the proposed route, the stamp was enough to persuade the Senate to vote in favour of Panama by a mere eight votes,- just after a volcano on the island of St Martinique had killed 30,000 people.

The stamp episode is a bitter chapter in Nicaraguan history, marking the start of deteriorating relations with the US. The stamp itself has pride of place in the canal museum in Panama.

Nicaragua's dreams of a canal linking its Atlantic and Pacific coasts never died, and more than one government has dusted off the idea.

The rewards for success appear to be considerable. About 15,000 ships use the Panama canal each year, carrying 200m tonnes of cargo, earning - the country about $800m. The closest Nicaragua has come was in 1982, when Japanese investors proposed building a canal using giant prefabricated concrete sections.

Since the Sandinista revolution ended with the 1990 elections, three other canal proposals have been put forward.

Two are so-called dry canals—high-speed railways designed to carry containers from deep. water ports at either end. Both envisage double-decker trains up to 25km long running on a nearly identical route across the country. The cost of the rival plans varies significantly, at $1.4bn against $2.6bn.

The third proposal is for the Eco-Canal, modestly priced at just $50m, which would make low-impact use of the San Juan river and Lake Nicaragua. The river would be dredged in places but maintain its natural riverbanks. Instead of traditional locks, air-powered moveable dams would be used to assist cargo barges to pass two stretches of rapids.

The Eco-Canal would serve national and regional trade, rather than compete for a share of the international container market It already has the approval of Nicaragua's congress, but has struggled to raise the $4m needed for a feasibility study.

At the opposite end of the budget spectrum is the hugely ambitious Grand Canal scheme that would use a series of connecting rivers from the Atlantic to Lake Nicaragua. A canal would be cut through a narrow strip of land separating the lake's shore from the Pacific.

The environment minister, Arturo Harding, says the government is backing the other canal projects too, as "they are among the best ways to put an end to our biggest problem: poverty".

The Grand Canal now faces the same problem as its rivals—raising the money—only on a much greater scale. The estimated cost is nearly 10 times Nicaragua's annual GDP.

Even if the finance is found, the lesson of the Panama canal is that when construction starts, so does trouble. It took two attempts, the creation of Panama as an independent country, the lives of thousands of workers, and 10 years to build a canal 80km long. With a span of 280km to cover, what will the final cost be for Nicaragua?

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