World Economy

Nicaragua Canal to Rival Panama

Nicaragua Canal to Rival Panama   Nicaragua Canal to Rival Panama

A Chinese company breaks ground Monday on a $50 billion canal across Nicaragua, an ambitious rival to the Panama Canal that critics condemn as a pipe dream and protesters say will wreck the environment.

President Daniel Ortega and the Chinese telecoms magnate behind the canal, Wang Jing, will inaugurated the project during a ceremony in the capital Managua, AFP reported.

But the actual construction will begin some 130 kilometers (80 miles) away, with the first access roads at the mouth of the Brito River on the Central American country’s Pacific coast.

Wang’s Hong Kong Nicaragua Development Investment (HKND) firm says 300 workers will build the roads and a port, the first of 50,000 people who will be hired to construct the massive 280-kilometer waterway connecting the Pacific Ocean and the Caribbean Sea.

The firm estimates the project will take five years. That is half the time it took the United States to complete the Panama Canal 100 years ago, considered one of the greatest engineering triumphs of the 20th century.

Nicaragua, which fought Panama then to host the first canal across Central America, has now reemerged as a modern-day rival.

Panama earns about $1 billion a year – six percent of its economy – off its canal, which spans 80 kilometers.

Ortega, the leftist president who has ruled Nicaragua for 18 of the past 35 years, hopes the project will make his country the richest in Central America.

  Dream Come True

“On December 22, what has been a century-long dream for many generations in Nicaragua starts to become a reality,” said Telemaco Talavera, spokesman for the country’s Canal Commission and HKND.

The canal route crosses Lake Nicaragua, the largest freshwater reserve in Central America, then runs through rainforest and at least 40 villages before terminating at the mouth of the Punta Gorda River in the southern Caribbean, where another port will be built.

Both ports and the canal will be designed to handle the modern mega-ships favored by global shipping firms, which can carry up to 25,000 containers.

That dwarfs the current capacity of the Panama Canal to the south, which can only handle ships carrying 5,000 containers.

Even after completion of an ongoing $5.25 billion project to upgrade the Panama Canal with a new set of locks – scheduled to be finished in early 2016, after a series of delays and a dispute over cost overruns – the century-old waterway will only be able to handle ships carrying up to 12,000 containers.

The Nicaragua project also includes construction of an international airport and a free-trade zone with residential and tourism facilities.