The realities of Nicaragua Canal

As the opening date for Panama Canal Expansion is approaching, the possibility of construction Nicaragua Canal again is somewhat of a hot topic. The project planners and their officials in Chinese HKND claim that the construction is soon to begin.

However, there are still more questions than answers. With a recent slowdown in economy of China, there are raising doubts that HKND can handle a project of such level with the total cost of $40-50 billion range. Besides, HKND has no experience with massive infrastracture projects.

At the same time, there significant environmental issues. Lake Nicaragua is the primary source of fresh water for the capital Managua. And dredging would greatly compromise local floura and fauna, as well as source threats to the population.

Besides, after several years of draught, the path of the canal which follows through rivers is recenly nothing more than a creek.

The feasibility of Nicaragua Canal

According to Jorge L. Quijano, the administrator of the Panama Canal Authority (ACP), the Panama Canal will allow passing 98% of the world vessels within the next two years, until 2018. The new locks are not able to serve the new generation of Triple-E containerships of Maersk Line, but that doesn’t mean the extension project will not be useful.

Yes, Triple-E’s are the largest ships in the world presently, with a length of more than 400 meters and 59 meters wide, but among 5,000 containerships in the world their share is only 1-2%. The expanded Panama Canal locks will allow passing of the vessels of up to 336 meters long.

The Maersk officials howeever stated that “the Canal of Nicaragua seems to make sense”. According to the administrator of the ACP that was nothing more, but a natural, socially acceptable comment.

Quijano continues: there is no proper economic justification for an engagement in additional investments to meet the demand of a small number of containerships. Yes, their share in total quantity of the world fleet will continue to grow, but it doesn’t justify such drastic changes in the project. Besides, the third set of locks is designed to allow adding additional on the side. That’s why when the demand is there, Panama could easily “install” one more set of locks to these that already exist.

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