Nicaragua approved a route yesterday for a Chinese-backed canal that would rival Panama’s, saying construction would begin by the end of the year. Reuters reports:
The committee of government officials, businessmen and academics approved a 172 mile (278 km) route from the mouth of the Brito river on the Pacific side to the Punto Gorda river on the Caribbean that was proposed by executives from the HK Nicaragua Canal Development Investment Co Ltd (HKND Group)…The plan is to finish the canal in 2019 and begin operations in 2020, Talavera said.The proposed channel would be more than three times longer than the 48-mile (77-km) Panama Canal, which took the United States a decade to build at the narrowest part of the Central American isthmus. It was completed in 1914.
Even with modern machinery this is an ambitious project. Wang Jing, the Chinese businessman behind HKND, calls it “the biggest [project] built in the history of humanity.” And as National Geographic notes, this is canal would be a coup for China:
For the Chinese, having a canal capable of handling huge bulk carriers would mean easier access to Venezuelan oil and Brazilian iron ore and soybeans, not to mention a valuable geopolitical foothold in the Americas.
For Nicaragua, the benefits are less clear. The country believes the canal will bring in money and jobs, but the agreement with HKND heavily favors the company, and most of the high-paying jobs may have go to foreign experts.Most importantly, not everyone agrees that the canal is commercially viable. Its main advantage would lie in offering a route for tankers that are larger than “Panamax”—the maximum dimensions of the Panama Canal. But the Panama route has recently been enlarged, and while it still won’t be able to handle the largest ships, it should be able to handle expected growth in traffic. The Nicaraguan route, meanwhile, will require expensive upkeep when in operation. Critics of the plan also charge that the construction will damage the environment, including an important body of fresh water, Lake Nicaragua.As we wrote recently, China is also expanding its reach into Africa with ambitious projects like a planned railway network in the east. Beijing, it seems, likes to think big.