eNews • June 28, 2013
Promoting a Cost-Effective, Reliable and Competitive Transportation System

Nicaragua gives Chinese firm contract to build alternative to Panama Canal

Nicaragua has awarded a Chinese company a 100-year concession to build an alternative to the Panama Canal, in a step that looks set to have profound geopolitical ramifications.

The president of the country's national assembly, Rene Nuñez, announced the $40 billion project, which will reinforce Beijing's growing influence on global trade and weaken US dominance over the key shipping route between the Pacific and Atlantic oceans.

The name of the company and other details have yet to be released, but the opposition congressman Luis Callejas said the government planned to grant a 100-year lease to the Chinese operator.

Nicaragua's president, Daniel Ortega, said recently that the new channel would be built through the waters of Lake Nicaragua.

The new route will be a higher-capacity alternative to the 99-year-old Panama Canal, which is currently being widened at the cost of $5.25 billion.

Last year, the Nicaraguan government noted that the new canal should be able to allow passage for mega-container ships with a dead weight of up to 250,000 tons. This is more than double the size of the vessels that will be able to pass through the Panama Canal after its expansion, it said.

According to a bill submitted to congress last year, Nicaragua's canal will be 72 feet deep and 178 miles long – bigger than Panama and Suez in all dimensions.

Under the initial plans for the project, the government was expected to be the majority shareholder, with construction taking 10 years and the first ship passing through the canal within six years. It is unclear if this is still the case.

Source: Guardian


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