MercoPress. South Atlantic News Agency

Nicaragua announces plan for Pacific/Caribbean waterway

Nicaragua announced Wednesday plans to build a waterway linking the Pacific and Atlantic that would carry bigger ships than the existing Panama Canal.

President Enrique Bolaños addressing in Managua the meeting of Defense ministers from the Western Hemisphere said the new route, at a cost of 18 billion US dollars and twelve years, was needed given the rise in world shipping.

Panama is due to vote in three weeks on whether to expand its own canal, at a cost of five billion US dollars, to let larger ships pass and cut queues.

"The galloping increase in world business demands another canal in addition to a widened Panama Canal," said President Bolaños.

If built, the Inter-Oceanic Nicaragua Canal taking advantage of the country's Great Lake and the river San Juan would save time and cut several hundred miles off the route from China to Europe or North America. It would also carry super-ships of up to 250,000 tons, significantly bigger than the vessels that currently pass through Panama.

Nicaragua has long held dreams of its own canal and was considered a potential route before the Panama waterway was constructed.

The Managua press revealed a few months ago that Russian companies were interested in the project. However there are alternatives to the Inter-Oceanic project and one of them is building two deep sea ports, one in the Pacific and another in the Caribbean linked by a 380 kilometers railway. This plan apparently is supported by private companies from Europe, China, South Korea, United States and Japan with a cost of 3.5 billion US dollars.

Another option sponsored by investors from Nicaragua and Guatemala is building a six lanes highway linking the Pacific and the Caribbean. The cost is estimated in 6 billion US dollars, including deep sea facilities at both ends and the timetable five years.

Panamanians will vote in a referendum on 22 October on whether to upgrade their canal, in what would be the biggest expansion since it opened in 1914. Some modern ships are now too wide to go through the canal and those ships that can pass have to queue for hours.

Under the proposals, wider locks and deeper and wider access canals would enable the canal to take ships carrying up to 10,000 containers. At present the limit is 4,000 containers. However, critics argue that when the work is finished in 2014/15, the Panama Canal will still be inadequate, causing it to miss out on business.

The 80km Panama waterway, which is used mainly by the US, Japan, China and Chile, currently handles nearly 5% of global trade.