October 20, 2014
Nicaragua canal project technically feasible, but shrouded in doubts
The US$40 billion channel that would compete with the Panama Canal planed to be 278-kilometre long, 230-520 metres wide and 27.6-metre deep
Nicaragua last Monday approved a proposed route for a shipping channel to link the Atlantic and Pacific oceans that would rival the Panama Canal, in a US$40 billion project that although according to experts is absolutely feasible from the technical point of view, raised many questions regarding its economic viability and, most of all, environmental concerns, as the channel would pass through Lake Nicaragua (also known as Lake Cocibolca), Central America’s largest source of sweet water.
The Nicaragua channel would be 278-kilometre long, between 230 metres and 520 metres wide and 27.6-metre deep, said the Hong Kong-based HKND group headed by Chinese lawyer Wang Jing, which is leading the project.
Construction should start this year and inauguration is expected for 2020.
The announcement made by the government of President Daniel Ortega comes at a time when the Panama Canal has completed about three quarters of an US$5.25 billion expansion project expected to be completed by January 2016.
The Panama Canal expansion has suffered delays due to a dispute over US$1.6 billion in over-costs that will take the total cost to nearly US$7 billion.
An arbitration to decide who will pay the over-costs — the Panama Canal Authority or the consortium led by Spain’s Sacyr and Italy’s Salini Impregilo — was due this month in Miami.
Nicaragua had been the leading alternative for the 77-kilometre channel that ultimately was inaugurated in Panama en 1914.
As a matter of fact, the Managua government first made an official mention to a Nicaraguan channel possibility as far back as 1833.
Actually, the first mention of a canal across the Isthmus of Panama dates back to 1534, when King Charles of Spain reportedly ordered to fathom that possibility to reach Peru by sea.
If all experts agree that building a channel through Nicaragua is technically feasible, the project is also raising many questions.
‘Of course it is feasible from a technical point,‘ Port Engineer José M. Landa, adviser to Argentina’s Under-Secretariat for Ports and Navigable Ways, told the Herald. ‘In fact, the questionings the project is facing are rather environmental than technical.‘
The Panama Canal was built by the US, which prevailed over British and French attempts.
Landa said that among the objections raised then by the US against Nicaragua were Nicaragua’s seismic activity.
In 1972 an earthquake destroyed Managua and killed 20,000 people and last April another tremor destroyed more than 1,200 houses and caused one death.
Engineer Julio Martínez, Interim Commercial Manager of the Buenos Aires Province-run Río Santiago Shipyard -- Argentina’s leading shipyard -- told the Herald that emission regulations are being applied to ships the same as to other motor vehicles. “The problem is what happens in case of a catastrophe in Lake Nicaragua.”
Gustavo Toubes, of the Argentine Association of Naval Engineers, said that the Association was puzzled due to the lack of environmental studies “as well as the lack of economic studies projecting scenarios for the next 30 years. “The launching of the Nicaragua project is remarkable considering that the Panama Canal is offering good services. Furthermore, is it being expanded.”
Martínez, for his part, said that currently, commodities freight fees were “not flourishing. I wonder whether time savings through the projected Nicaragua Canal will compensate the fees.”
He also highlighted that there is no much information regarding the size of ships that would fit in the new channel. “To say that the channel will have a maximum width of 520 metres doesn’t mean much. The Panama Canal in its current shape has a 300-metre width but the limitation comes from its 32.25-metre wide locks.
“It would be logical to think that if the Nicaragua Canal would be 27-metre deep, it would be simply clumsy not to builds locks that would accommodate present and future large vessels. Let’s recall that until the 1960s the Panama Canal allowed in the largest vessels of the time. Since then, and mostly in the 1970s, ships’ width increased, exceeding the maximum measures admitted by the canal.”
Panama is building two new flights of locks parallel to the existing one, that will be 427-metre long, 55-metre wide, and 18.3-metre deep.
Some say that the size of the vessels may not necessarily be crucial.
“Mega-vessels have been built mainly with a view to trade between hub mega-ports, such as Rotterdam in Europe, Atlanta in the US, and maybe Río Grande or Santos in Brazil, from where cargo can be transshipped to smaller ships,” Javier Valladares a former chairman of the United Nations Educational, Scientific and Cultural Organization’s (UNESCO) Intergovernmental Oceanographic Commission (IOC), told the Herald.
“For instance, the expansion of Panama Canal has been designed thinking about taking coal from China to the east coast of the US in bulk carriers that were already larger than the Panamaxes,” he told the Herald. Panamaxes are the largest ships admitted by that canal. Post-Panamaxes or over-Panamaxes do not fit in it.
Criticism of the Nicaragua project has also targeted the “enigmatic” Wang, 41, who also heads Beijing Xinwei Telecom Technology Inc and who, according to a Reuters report published last May, insists he’s not an agent of the Beijing government. “I know you don’t believe me… You believe there are people from the Chinese government in the background providing support,” Wang said.
Chinese President Xi Jinping, Premier Li Keqiang and former leaders Jiang Zemin and Wen Jiabao visited the state-connected wireless communication technologies company Wang took control of four years ago.
Landa said, however, that if Wang was not very well known until now, the consultant firms attending the presentation of the project last week in Managua were among the world’s top ones. “It would be very strange for those companies to support a non-feasible project.”