SEA ISLAND, Ga. — A canal through Nicaragua connecting the Atlantic and Pacific oceans will cost double proponents’ estimate and will likely never be built, the No. 2 official at the Panama Canal said today.
“We don’t see how that project will be ever constructed because it doesn’t make economic sense,” Manuel Benitez, deputy administrator of the Panama Canal Authority, said in comments to the JOC and other media at the Georgia Foreign Trade Conference.
An idea that goes back to the 1820s, a Nicaragua canal has seen new life after the HKNG Group, owned by Chinese telecom billionaire Wang Jing, won a 50-year license last June to develop the canal. In January, Wang and Nicaraguan President Daniel Ortega announced that construction of what has been described as a $40 billion project will begin in December 2014.
Benitez cited several reasons why the project is unfeasible, including the fact that the proposed route, unlike the Panama Canal, is in the path of hurricanes, near active volcanoes and in a seismically active region — reasons why Panama was chosen as the location for the existing canal. He said the route through Nicaragua would be 286 kilometers, versus 80 kilometers through the Panama Canal, eating up “the time you will be saving from Asia to U.S. Cast Coast.”
The project would require a set of locks 30 meters above sea level, and “from there you have to construct another artificial lake to go over the mountains of Nicaragua, which will require dam building,” said Benitez, an engineer by training. “The amount of excavation required is really mind boggling We don’t think it can be done for anything less than US$80 billion.”
As part of its expansion project to build a third set of locks to accommodate container ships with capacity of up to 12,500 TEUs, Panama has made a provision for a 4th set of locks for even larger ships should the market mature to that point.