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New Central America Canal Route Unveiled, Impact on World Shipping Uncertain

July 9, 2014

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A new trade route has been settled on linking the Pacific Ocean with the Caribbean and Atlantic Ocean, which could be a boon that changes the face of container shipping, or be a boondoggle.

The Nicaraguan government and the Chinese company HK Nicaragua Canal Development Investment plan to start construction in December of a 173-mile-long canal in the Central American nation. It will be three times longer than the Panama Canal to the south. HKND gets to operate the canal for 50 years with the possibility of renewing it for another half-century.

Plans call for the canal to be able to handle either the widest container ships in service or those that are planned, but officials in Nicaragua insist there is no rivalry with the Panama Canal.

The goal is to complete the $40 billion project in five years, but critics are already saying it will never happen. The project cost is four times Nicaragua’s entire gross domestic product. Some say it could cost even more, as much as $100 billion.

The canal would start at the mouth of the Brito River on the Pacific Coast, flowing to the Punta Gorda River on the east. The project plans also include two deep-water ports, a free-trade area and tourism projects.

Adding to the uncertainty is how the expansion of the Panama Canal, which is expected to be completed in 2015, will affect the Nicaraguan project. Another question is the expected opening of the Arctic to trade routes, due to global warming, dramatically reducing transport times between Asia and Europe.

Comments

  1. 1. David E Bruderly [ July 10, 2014 @ 09:20AM ]

    This is a boondoggle as is the rush to larger container ships. Chinese speculators need to focus on improving opportunities and quality of life for the Chinese & Nicaraguan people with investment in sustainable internal infrastructure. Bigger is not better when bigger fails sustainability tests; and bigger ships this canal project is designed to serve fail those test.

  2. 2. David E Bruderly [ July 10, 2014 @ 09:21AM ]

    This is a boondoggle as is the rush to larger container ships. Chinese speculators need to focus on improving opportunities and quality of life for the Chinese & Nicaraguan people with investment in sustainable internal infrastructure. Bigger is not better when bigger fails sustainability tests; and bigger ships this canal project is designed to serve fail those test.

 

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