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Nicaragua plans a big dig to rival Panama canal

By Staff writer of The Christian Science Monitor / November 15, 2006



OMETEPE ISLAND, NICARAGUA

The southern part of Ometepe Island is barely touched by modernity. On the single dirt road that flanks Lake Nicaragua, pigs are left undisturbed to cool off in puddles.

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But if planners in the nation's capital, Managua, have their way, people here will bear witness to the day's most advanced technology, with boats the length of five soccer fields plodding from the Atlantic to the Pacific, passing Ometepe along the way.

Amid news that the Panama Canal will be expanded to accommodate the growing size and number of ships traversing the globe, Nicaragua has announced its own plan for an interoceanic canal, which planners say would be the world's largest.

Plans to construct a canal across Nicaragua have been around for well over a century. But Mario Alonso, the project's main advocate, says this time it'll happen. He will present legislation to the National Assembly this month, and then open up the project to bidders from as far away as Russia and China, which is now expanding the port facilities it owns on both ends of Panama's canal.

Mr. Alonso says demand drives the project, but a personal mission drives him, as it has others who have promoted such megaprojects before him.

"We are convinced that this is not just a dream but a reality," says Alonso, the former president of the Central Bank of Nicaragua, who now sits on the president-appointed Grand Canal Working Commission and eagerly pulls out maps and studies of the project profile. "This is my own responsibility to give this opportunity to Nicaragua, and if people don't want it, I will find a way for Nicaragua to want it."

Historic rivalry with Panama

Before the Panama Canal got started in 1904, Nicaragua had been its biggest rival. The competition was so fierce that those lobbying for Panama issued stamps with a spewing volcano on Ometepe, to warn of seismic activity. Nicaragua was still so coveted, though, that in 1914, the same year Panama opened, the US signed a treaty with Nicaragua giving it the exclusive rights to build a canal there, too. The treaty was terminated in 1970.

"I'm happy we didn't do it then," Alonso says. "Now we can build a real canal."

Costing $18 billion, the 172-mile-long canal would take 12 years to design and construct, according to the project profile. It would attract megaships that can carry double the load of boats that will be able to cross an upgraded Panama Canal. There are 900 such ships today and an expected 3,000 by 2019.

A US company sailing megaships roundtrip from the East Coast to Japan would save $2 million and 34 days using a Nicaragua canal, planners claim.

Independent experts say it might be tough to convince the world that two canals are needed in Central America. Among the biggest challenges: the cost estimate is more than four times Nicaragua's current GDP of $4.9 billion, according to the US State Department. But the growth in world maritime cargo – an average of 3.9 percent annually over the last 15 years – might work in its favor.

"If you look at where we are getting the supply of goods, so much of it is coming from Asia.... More and more is being manufactured overseas" says Marc Hershman, professor of law and marine affairs at the University of Washington's School of Marine Affairs. "To underestimate [maritime] growth is probably wrong."

The project would be funded entirely by private investors, and Nicaragua would earn a percentage of profits, to be determined, for lending its geography and natural resources.

The importance of such megaprojects reach beyond economics and pragmatics. "A small country can suddenly become a big country," says Paul Finch, editor of the London-based Architectural Review magazine. "Look at Panama. If you didn't have a canal, who cares? [Such projects] make a powerful symbolic statement about the place of that country in the world."

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