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With Chinese Investment, Nicaraguan Passage Could Dwarf Panama Canal 322

Nicaragua is now home to the early stages of one of the largest infrastructure projects on earth, plans for which have been raising questions for some time now. In a move that will affect global trade in the long term, "A Chinese telecom billionaire has joined forces with Nicaragua's famously anti-American president to construct a waterway between the Caribbean Sea and the Pacific Ocean to rival the Panama Canal. The massive engineering undertaking would literally slice through Nicaragua and be large enough to accommodate the supertankers that are the hallmark of fleets around the world today." (Here's a related article with a bit more on the project from Wang Jing, the Chinese telecoms entrepreneur now also at the head of the Hong Kong Nicaragua Canal Development Investment Co.) One potential problem with the canal: disruption of surfing in Nicaragua.
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With Chinese Investment, Nicaraguan Passage Could Dwarf Panama Canal

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  • by peter303 ( 12292 ) on Thursday August 07, 2014 @01:01PM (#47623805)
    France, US, Columbia, and Panama. Jungle diseases of workers was a huge problem at beginning.
  • by k6mfw ( 1182893 ) on Thursday August 07, 2014 @01:08PM (#47623871)
    My impression is Chinese are thinking big plans for future. Way back in late 1800s early 1900s US was thinking same thing: Panama Canal was a huge project with lots of opportunity for failure. But reaped benefits for decades after. Also Chinese have lots of cash and putting it into big projects (ok some will fail but whatever they will secure strategic advantage). Meanwhile US put lots of resources into backwards countries with not much to show for it.
    • Due the fact that the panama canal is now too small for modern tankers, something like this needs to be done. If only the US would step up and do things like this.. it's in our best interest! Monroe Doctrine!

      • Due the fact that the panama canal is now too small for modern tankers, something like this needs to be done.

        There is little need for super-tankers to transit the canal. The price of oil is about the same on either coast, and oil production in Alaska and California pretty well balance out the demand.

        • by AK Marc ( 707885 ) on Thursday August 07, 2014 @01:49PM (#47624345)
          Obviously the Chinese think differently. Tankers from Nigera to China have to go the other way, or down past the cape.

          The Panama Canal was built to get US goods from the east coast to the west coast. The new canal is to connect China with Europe/Africa. They have different goals.
        • by TubeSteak ( 669689 ) on Thursday August 07, 2014 @03:14PM (#47625259) Journal

          There is little need for super-tankers to transit the canal. The price of oil is about the same on either coast, and oil production in Alaska and California pretty well balance out the demand.

          Oil? Who said this was about oil?

          South America has massive mineral reserves.
          The Chinese have also been buying up huge chunks of land for farming grains that can be shipped back to China.

          China wants this canal so it can cheaply move enormous volumes of resources (especially from Brazil) to its ports.
          $49 billion is a drop in the bucket for China's long term economic needs.

      • Due the fact that the panama canal is now too small for modern tankers, something like this needs to be done. If only the US would step up and do things like this.. it's in our best interest! Monroe Doctrine!

        The Panamanians are well underway to expanding and widening [] the current canal.

    • The US does not put lots of money into backwards countries. That is a misconception based on failing to look at percentages. Less than 1%. $37 Billion - including aid to foreign militaries

      For comparison, the total estimate cost for this Nicaraguan Canal is about $49 Billion.

      In other words, this one single Chinese project is MORE than all the money the US spent for the entire world last year.

      Also note, this canal is not technically a private commercial Chinese project, not a government one. A proper

      • Also note, this canal is not technically a private commercial Chinese project, not a government one. A proper comparison would look at how much US companies invest in foreign countries, and I assure you it is a lot more than $50 Billion.

        At this level, the distinction between 'corporate' and 'government' is pretty blurry. Yes, Exxon spends the money. But Exxon 'saves' that money in tax breaks and other incentives given to it by the government. In China, the situation is a bit different, typically running the money through various banks, but the end result is the same.

        That said, China spends at least as much money in foreign countries for development as does the US.

    • US : 1900's Caribbean :: China : 2000's Pacific.
      The United Fruit company didn't fuck around.
  • Capitalism and free trade, right guys?

    Suck it up!

  • Interesting (Score:5, Interesting)

    by ErichTheRed ( 39327 ) on Thursday August 07, 2014 @01:10PM (#47623893)

    When the original Panama Canal was built, there were huge engineering problems that couldn't be easily solved. What will be interesting to see is how quickly this one will be completed with modern technology, modern medicine against tropical diseases, etc. I thought there were plans to widen the existing Panama Canal - were those scrapped?

    The other interesting thing to see is China making these huge investments in other countries. Having a competitor for the Panama Canal would really change international trade. I also heard China is investing heavily in Africa and the Middle East, basically for leverage against the US and Europe. It may be one telecom billionaire making the investment, but I'm sure the Chinese government is going to do anything it can to help.

    One of the things most people see as a bug but I see as a feature with China is their ability to just do things. There's no debate, no fighting with Congress, etc...they can just tell millions of people to move out of the way of an infrastructure project (e.g. Three Gorges Dam.) That's going to be a huge advantage they have over the West during this century. Another big shift that China is basically just making happen by fiat is the forced urbanization of the country...moving peasant farmers off their land and into cities (which is what those "Ghost Cities" are supposed to be for.) Just look at the fights that happen when someone's land is claimed by eminent domain for a construction project in the US...none of that happens there, and anyone who complains is marginalized.

    • I thought there were plans to widen the existing Panama Canal - were those scrapped?

      No, that project is currently under construction and should be completed in 2015.

      Incidentally, TFA says this proposed canal would accommodate ships up to 400,000 tons of displacement, while the Wikipedia article for the Panama Canal expansion says the new locks will accommodate ships that are 1400' x 180' x 60', which is about 428,000 tons of displacement (if my math is right). Therefore, this proposed canal won't have an ad

      • So, I read more of TFA, and in it the guy behind the proposed canal claims the post-expansion Panama Canal would only be able to handle up to 150,000 tons of displacement. I'm not sure which number is right.

        • by Ancil ( 622971 )

          Shipping tonnage and water displacement are two very different things. Tonnage refers to cargo, and because it determines a lot of fees and taxes, the industry has been "tinkering" with it for centuries:

          Tonnage (ships) []

          For a good explanation of the Panama's post-expansion capacity, see:

          The New Panamax []

        • by cdrudge ( 68377 )

          Panamax is 12.04m draft, 32.31m beam, and 294.13m length for a total volume of 114420 m^3. With a tropical fresh water density of 0.9954 g/cm^3, that comes out to about 113,894 metric tons (125,547 short tons) of displacement.

          New Panamax is 15.2m draft, 49m beam, and 366m length for a volume of 272597 m^3 or 271,343 (299,105 short tons) of displacement.

    • The Panama Canal expansion project is almost done.

      Ports on the eastern seaboard are being expanded to handle the "New Panamax" sized ships that will be able to traverse the newly widened canal. I seriously doubt that those ports are going to expand again soon to accommodate the new class of ship for this Nicaragua Canal.

      And yes, Authoritarianism does make the trains run on time.

    • Re:Interesting (Score:4, Insightful)

      by timeOday ( 582209 ) on Thursday August 07, 2014 @01:27PM (#47624099)

      I also heard China is investing heavily in Africa and the Middle East, basically for leverage against the US and Europe.

      What do you mean by "leverage"? The reason China is investing heavily in Africa and the Middle East is because there's where there are the most goodies still buried in the ground waiting for the taking.

      • by AK Marc ( 707885 )
        And Africa is where the next cheap labor is. China is already outsourcing to India, they want to be able to do the same with Africa more easily.
        • Africa combined is smaller in terms of population then India. And it's incredibly balkanized.

          After China and India build a consumer/middle class, the really cheap labor is done. China will lose it's ass in Africa on all ventures other then mining.

    • There's no debate, no fighting with Congress, etc...

      No "environmental impact studies," either... :p

    • Re:Interesting (Score:5, Informative)

      by R3d M3rcury ( 871886 ) on Thursday August 07, 2014 @03:07PM (#47625179) Journal

      One of the things most people see as a bug but I see as a feature with China is their ability to just do things. There's no debate, no fighting with Congress, etc...they can just tell millions of people to move out of the way [...]

      Which is fine--if you're not one of the millions of people.

      Back in the late 90s, my roommate went back to Vietnam to visit some friends. She went back to the house she grew up in and discovered that almost all of the people who lived there had moved away. Why? Because the street they lived on was across from a hospital and it was tough for the ambulances to get in. So the government decided they were going to widen the street. So they told everybody, "Hey, we're widening the street and you may end up losing the front 6 feet from your house. Sorry about that." No wasting money buying property or law-suits or anything like that. Just a "You're fucked. Move on."

      Of course, there's not much for disclosure rules, either. So what everybody did was sell their place to the next sucker in line and get out fast. Of course, once those people found out, they did the same thing.

      What's funny is that had been going on for three years. The government still hadn't shown up to widen the street. In fact, when she went back in 2012, they still hadn't widened the street.

      I kinda like that part of the 5th Amendment to the Constitution about "[...] nor shall private property be taken for public use, without just compensation." Yeah, it does gum up the works for worthwhile infrastructure projects, I agree. But I'd rather not wake up one morning and find the house that I live in is going to be part of a freeway and I'd better move...

  • what Panama is to the US, then fine, go for it.

  • . . . or maybe it's "Carlos".

    The canal project will bring in more bucks than surfing tourism, so that will pretty much settle it.

    • "I know a place
      Where you're all going to go
      They'll pay you to kill
      If You're eighteen years old
      First You'll need a haircut
      And then some new clothes
      They'll stick you in a jungle
      To play G.I. Joe


      You fight for democracy
      And the "American Way"
      But you're not in your country
      "What am I doing here?" you say
      But now it's too late
      You're entering Managua
      If you had brought your surfboard
      You could surf Nicaragua

      Video here []

  • New Panamax (Score:5, Interesting)

    by Tailhook ( 98486 ) on Thursday August 07, 2014 @01:22PM (#47624033)

    The current expansion of the Panama canal goes online [] next year. "New Panamax" ships are 13,000 TEU vs 5,000 for current Panamax ships. All the important East coast ports have already been or a currently being dredged out to accommodate these ships. This was accomplished quickly and quietly beginning in 2012 when Obama exempted [] the dredging operations from the Clean Air Act, Clean Water Act and Endangered Species Act.

    Guess they'll be needing another bunch of pencil whipped wavers to dredge out the ports even deeper for the EquadorMax ships, because what China wants China gets.

  • by Solandri ( 704621 ) on Thursday August 07, 2014 @01:29PM (#47624123)
    The Panama Canal - by virtue of being the only alternative to a trip around the tip of South America - can charge passage fees just less than the cost of a trip around South America. Consequently they make a huge profit margin off of operating it. A quick google search [] says it brings in about $2 billion/yr, but only costs about $600 million/yr to operate. So they've got a massive 233% profit margin.

    Add a second canal, and suddenly they're not competing with a trip around South America. They're competing with each other. Unless they collude together to fix the prices so that they're essentially the same (divide traffic 50/50, which might actually be a good thing since I hear wait times at the Panama Canal can be a week or more), the price is going to drop to slightly higher than what it costs them to operate the more expensive canal. That is the nature of competition. e.g. If the profit margin drops to a still-high 50%, profit from the current level of traffic would be just $300m/yr, and it'll take them 167 years to recoup the $50b construction cost even if they were able to borrow that $50b interest-free. Since the Panama Canal is essentially paid for, the Nicaraguan canal would probably have higher costs and thus slimmer margins, and will likely take centuries to pay for its construction.

    A Nicaraguan canal would have the advantage of allowing passage of larger-than-Panamax ships (ships designed so their width barely fits through the Panama Canal). But again, if they try to charge significantly more for such ships, operators will simply continue building Panamax ships. Any surcharge they add on has to be less than the money operators would save by using larger-than-Panamax ships. (Significantly more since such ships would have to be built in the first place.)

    It'll be great for the rest of the world - cheaper transport costs, more capacity, faster travel. But could end up tanking both the Nicaraguan and Panamanian economies.
    • by joss ( 1346 )

      > That is the nature of competition.

      In a situation with dozen's or hundreds of competitors it is, but without government enforcement cartels develop naturally and quickly (unless one company thinks it can bankrupt the others and become a monopoly). It's far more likely Nicaragua and Panama will come to an agreement.

    • I agree. This development is an unqualified good thing, unless you're Panamanian.

  • And then ... (Score:2, Interesting)

    by xfizik ( 3491039 )
    What are the chances that once it's built, the U.S. will find that Nicaragua is not democratic enough to operate it "independently"?
    • by camg188 ( 932324 )
      I don't think you need to fear that. The US gave control of the Panama canal to Panama back in the 80's. Why would it be different in Nicaragua, particularly if the US didn't build it?
      • such canals are very vulnerable in wartime, reasonable expectation is to not depend on them as their workings will be destroyed.

  • by camg188 ( 932324 ) on Thursday August 07, 2014 @01:33PM (#47624171)
    A quick look at google maps and I estimate
    Panama is about 40 miles across and about 150 feet (65 k, 40 m) of altitude to overcome.
    Nicaragua is about 150 miles and about 650 feet (240 k, 200 m) of altitude to overcome. The altitude difference would add a lot to operating expenses. They'd have to pump a lot of water to locks about 600 feet higher than in Panama.
    • Re: (Score:2, Interesting)

      by Anonymous Coward

      They are going through Lake Nicaraugua, which will considerably shorten the length of the canal they need (to about 80 miles).

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        So they are going to take a shortcut through one of the largest freshwater lakes in Nicaragua for Ocean traffic. This should end in even more environmental hilarity than the amount of raw sewage they already apparently dump into the lake.

        • by rgbscan ( 321794 )

          As the lake is above sea level, apparently (IANA Civil Engineer) this will keep the salt out as the lake will just drain to the sea. Apparently. This is what the construction propaganda says anyway.

      • by camg188 ( 932324 )
        I think the altitude difference may be a bigger factor than the length of the canal.
  • by FridayBob ( 619244 ) on Thursday August 07, 2014 @01:57PM (#47624441) Homepage
    If the Nicaragua canal does not contain any locks, as does the Panama canal, one particular sea snake species, Pelamis platura [], will almost certainly enter the Caribbean, the Atlantic and the Mediterranean where there are currently no sea snakes. So far, Pelamis and other sea snake species have been prevented from entering the Atlantic due to the cold waters in the north and south, the higher salinity of the Red Sea and the system of locks and fresh water of the Panama Canal. If the isthmus of Central America is breached by a lockless canal, I see no reason why P. platura (just this one snake species) and many other unwanted tropical denizens of the Pacific will not make it through to the Caribbean, the Atlantic and the Mediterranean, while many from the Caribbean will get through to the Atlantic. In other words, without any locks, this will be a recipe for an environmental disaster. Let's hope I'm wrong and they're planning to build a minimum set of locks anyway.
    • The lake they plan to use is above sea level. They would need at locks on either side of it to use the lake.
    • sad news for you, must humans do not gives a shit about what sea snakes live where, and to them your "disaster" just means "things will be different"

  • They won't make a profit. The best they will end up doing is destroying the economy of Panama. The Panama Canal makes only about $800 million a year. (My source []

    So if the Nicaraguan Canal costs only $50 billion, (the current estimate is $49 Billion), then assuming terrorists blew up the Panama canal, then maybe Nicaraguan Canal would be $1 billion a year, also know as a 2% return on investment. It would take 50 years just to break even, let alone earn a profit.

    Good luck with that business plan.


  • by Ivan Stepaniuk ( 1569563 ) on Thursday August 07, 2014 @02:07PM (#47624559)

    A 10 seconds look at the geographic situation of Nicaragua is enough to realize there is no way to do this withouth destroying thousands of square meters of forest and endangering a freshwater lake that is bigger than Delaware.

  • Very very old news (Score:5, Informative)

    by coldsalmon ( 946941 ) on Thursday August 07, 2014 @02:09PM (#47624577)

    Lake Nicaragua was considered for a canal even before Panama. The idea has been picked up and dropped many times since, which is not to say that it won't succeed this time. []

  • by coldsalmon ( 946941 ) on Thursday August 07, 2014 @02:17PM (#47624643)

    Doesn't have the same ring to it. I can see why they picked Panama for the first one.

  • by 140Mandak262Jamuna ( 970587 ) on Thursday August 07, 2014 @02:35PM (#47624819) Journal
    The Europeans invested so much and spent so much to build the original Panama canal. They went bankrupt and USA picked up the semi finished canal cheaply. At that time that canal was part of Columbia. A group of influential bankers in New York with pulled levers in Washington DC, overseas American Navy etc, intervened in an internal conflict in Columbia and peeled off the zone of the canal from Columbia. They got Washington to recognize Panama with their puppets as the government. The puppets signed a highly lopsided deal favoring the banksters. They pocketed the money and walked off the mess. It took some 18 more years of stand off and then US Taxpayers stepped in and compensated the Columbians for stealing their canal.

    So don't worry, our government could be weak and our military power could be misapplied. But we have some really cunning bankers who would steal the loin cloth of Papua New Guineans if they could make a dollar or two. They will steal this spanking new Chinese built canal from Nicaragua for us. Some two decades later we the tax payers will compensate the victims of their greed.

  • by nimbius ( 983462 ) on Thursday August 07, 2014 @02:47PM (#47624963) Homepage
    i know its offtopic, but adding the "anti american" thing is redundant. the US has a well documented 12 year history of funding and training contra rebels to burn down hospitals and schools in an attempt to dissuade the country from communism and socialism. The big news here is that american regional power does not appear to have had any ability to slow or stop this project, whereas 30 years ago a south american country partnering with an openly communist superpower would have likely put an aircraft carrier in the region.
  • by greenguy ( 162630 ) <estebandido&gmail,com> on Thursday August 07, 2014 @04:14PM (#47625707) Homepage Journal

    ... and there was a broad consensus among both the ex-pats and the Nicaraguans I knew that a canal through Nicaragua would be an unqualified ecological disaster. It would cut a wide swath through the little remaining virgin forest there, not to mention clearing out many of the remaining indigenous communities. They apparently also want to build an airport, an oil pipeline, multiple "free-trade" zones, and a second deep-water port. I can't believe that surfing is considered more important than all this.

Things are not as simple as they seems at first. - Edward Thorp