The world's new miracle
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talkpoliticsGreen light given for vast new oceanic canal across Nicaragua
The Panama canal between the Pacific and Atlantic ocean is considered one of the seven wonders of the modern world. But now Nicaragua has the ambition to surpass that achievement of technology by building a second canal through Central America that would compete with the old one, which would potentially vastly improve the country's economic position in the process.
Possible routes:
The idea is hardly a new one. In the 19th century the German explorer Alexander von Humboldt dreamed of a canal between the two oceans, possibly crossing through Nicaragua (he thought Lake Nicaragua was very suitable for that). In 1849 the Nicaraguan government and the US entrepreneur Cornelius Vanderbilt signed a contract for building the new connection, but the project never came to fruition.
Now Nicaragua seems determined to resurrect the idea. The poor Central American country wants to become a crossroads for global trade. If it becomes reality, the projected canal would be about 300 km long, and it'll bring billions of revenue. And now a contract has been signed with the HKND Group of Hong Kong.
The optimists expect that the new canal would trigger an economic growth unseen in the region in recent decades. The La Prensa newspaper is already predicting a 15% GDP annual growth. Additional infrastructure running along the canal would include railways, an oil pipeline, two large ports and a new airport. The whole project is worth over $40 billion, 51% of the shares being held by the Nicaraguan state, the rest by the contractor.
The HKND Group is promising that the new route has huge potential to become the most favored waterway for cargo ships and petrol tankers, as it'd cut the time for reaching the end consumers. Ironically, it could be Panama's economic boom that has encouraged Nicaragua to believe it could repeat the success of the first canal.
On the other hand, there's criticism directed at the Nicaraguan government, experts criticizing it that it's acting too hastily, and putting itself into a debt trap that it cannot possibly come out from. And then, there are other uncertainties surrounding this project. For instance, no negotiations were ever initiated with the indigenous population along the Caribbean coast, through whose lands the canal would pass. The local communities own the land, and yet they were never informed about these plans.
In turn, the opposition is angry that a foreign company would be granted a 100-year concession and exclusive rights on using the canal. And there are still a lot of questions about who truly sits behind the HKND Group. The board chairman of that corporation is Wang Jing, whose telecommunications company bought the concession for Nicaragua's mobile network last year, and this is raising concerns about monopolist manoeuvres taking place (HKND has hasted to promptly deny any involvement of the Chinese government itself). The problem is, Jing's company has done exactly nothing since it signed the telecommunications contract: no infrastructure has been built to develop the mobile grid of the country. So the question is, if they can't build something as relatively simple as a phone network, what's left for a huge project like an inter-oceanic canal. In turn, the environmentalists are mostly worried about the fact that all discussed routes would be passing through regions that are full with protected areas (including the majestic Lake Nicaragua), and the environmental impact on the region could be indeed severe.
And then, there's of course the valid question of the practical need for another canal which is just two countries away from the already existing one. But of course, sea transport isn't what it used to be at the time of its construction, and today's economic realities and the need for enhanced trade infrastructure (or in other words, the "bottom-line", aka profit) could again turn out to be the ultimate factor here.
The Panama canal between the Pacific and Atlantic ocean is considered one of the seven wonders of the modern world. But now Nicaragua has the ambition to surpass that achievement of technology by building a second canal through Central America that would compete with the old one, which would potentially vastly improve the country's economic position in the process.
Possible routes:
The idea is hardly a new one. In the 19th century the German explorer Alexander von Humboldt dreamed of a canal between the two oceans, possibly crossing through Nicaragua (he thought Lake Nicaragua was very suitable for that). In 1849 the Nicaraguan government and the US entrepreneur Cornelius Vanderbilt signed a contract for building the new connection, but the project never came to fruition.
Now Nicaragua seems determined to resurrect the idea. The poor Central American country wants to become a crossroads for global trade. If it becomes reality, the projected canal would be about 300 km long, and it'll bring billions of revenue. And now a contract has been signed with the HKND Group of Hong Kong.
The optimists expect that the new canal would trigger an economic growth unseen in the region in recent decades. The La Prensa newspaper is already predicting a 15% GDP annual growth. Additional infrastructure running along the canal would include railways, an oil pipeline, two large ports and a new airport. The whole project is worth over $40 billion, 51% of the shares being held by the Nicaraguan state, the rest by the contractor.
The HKND Group is promising that the new route has huge potential to become the most favored waterway for cargo ships and petrol tankers, as it'd cut the time for reaching the end consumers. Ironically, it could be Panama's economic boom that has encouraged Nicaragua to believe it could repeat the success of the first canal.
On the other hand, there's criticism directed at the Nicaraguan government, experts criticizing it that it's acting too hastily, and putting itself into a debt trap that it cannot possibly come out from. And then, there are other uncertainties surrounding this project. For instance, no negotiations were ever initiated with the indigenous population along the Caribbean coast, through whose lands the canal would pass. The local communities own the land, and yet they were never informed about these plans.
In turn, the opposition is angry that a foreign company would be granted a 100-year concession and exclusive rights on using the canal. And there are still a lot of questions about who truly sits behind the HKND Group. The board chairman of that corporation is Wang Jing, whose telecommunications company bought the concession for Nicaragua's mobile network last year, and this is raising concerns about monopolist manoeuvres taking place (HKND has hasted to promptly deny any involvement of the Chinese government itself). The problem is, Jing's company has done exactly nothing since it signed the telecommunications contract: no infrastructure has been built to develop the mobile grid of the country. So the question is, if they can't build something as relatively simple as a phone network, what's left for a huge project like an inter-oceanic canal. In turn, the environmentalists are mostly worried about the fact that all discussed routes would be passing through regions that are full with protected areas (including the majestic Lake Nicaragua), and the environmental impact on the region could be indeed severe.
And then, there's of course the valid question of the practical need for another canal which is just two countries away from the already existing one. But of course, sea transport isn't what it used to be at the time of its construction, and today's economic realities and the need for enhanced trade infrastructure (or in other words, the "bottom-line", aka profit) could again turn out to be the ultimate factor here.
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Date: 24/6/13 22:05 (UTC)One of the proposed routes has a significantly lower environmental impact (route #4 on the map) because it would use an existing river and just add new locks at the entrance and exit. And it's by far the cheapest one. But for some reason HKND Group has announced that they probably won't be opting for that route.
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