Posted on 10/19/2003 8:30:59 PM PDT by blam
Nicaraguan dream to rival Panama's trade route
Price of Central American ambition: $25bn and 10 years' construction over 175 miles
Rupert Widdicombe in Managua
Monday October 20, 2003
The Guardian (UK)
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 goverment of Nicaragua. The new waterway - being proposed by a public private partnership called the Grand Canal Foundation - will cost an estimated $25bn (£15bn) 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 Enriqué 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 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.
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 100 miles from the proposed route, the stamp was enough to persuade the Senate to vote in favour of Panama by just eight votes - a volcano on the island of St Martinique had recently 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. Nearly 15,000 ships use the Panama canal each year carrying 200m tonnes of cargo, earning the country nearly $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 16 miles 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.
Grand plans
The Eco-Canal will 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 lakeshore 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 the construction starts, the trouble starts.
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 50 miles long. With 175 miles to cover, what will the final cost be for Nicaragua?
"The Great Canal has been a dream for Nicaragua for many decades," said President Enriqué Bolaños, who lent army helicopters to a commercial Chinese delegation to fly over the proposed route.
Sounds like it, wider-deeper.
Those ideas have been around for decades. No secrets here.
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