President Daniel Ortega today revived Nicaragua’s 500-year-old canal fantasy by sending “The Project for the Grand Canal of Nicaragua” to the National Assembly for discussion.
“Today the President of the Republic has sent the National Assembly the project of the Grand Canal of Nicaragua to be discussed in the National Assembly, where the representatives of the Nicaraguan people were elected less than a year ago,” said First Lady Rosario Murillo.
Murillo made the announcement during her daily soliloquy on Sandinista TV. According to official media, she said the project is a “strategic one for the development of social justice and the strengthening of the Christian, Socialist and Solidarity model.”
“From the Río San Juan, this project that was the dream of Sandino, this project that has been the dream of so many generations of Nicaraguans, because we know that there is the future on earth, in our natural resources, in the water, in all that God gave us,” the first lady said breathlessly. “We will follow the debates in the National Assembly. We will follow them as an expression of women, these female lawmakers that make us so proud.”
Female lawmakers would really make the country proud if they could figure out a way to raise the $18 billion that Nicaragua needs to build its canal.
Back in 2004, Nicaragua had four canal projects bumping around the country in one form or another: the $35-54 million EcoCanal, which would have used barges to bring containers up the Rio San Juan to Granada; two “dry canal” freight railroad projects, and the lofty Grand Canal Project that was proposed by the government but without congressional approval, environmental studies, or money.
When Ortega returned to power in 2006, he also promised to build a canal and started to study the various projects. Sources say Ortega decided to scrap the EcoCanal project—the one that was the furthest advanced at the time—because Venezuelan President Hugo Chávez didn’t think it would support a parallel oil pipeline. Meanwhile, plans to build a $3 billion dry canal are still on the table, according to company that owns the 40-year concession rights (see story here).
Ortega, however, has apparently set his mind on the most ambitious plan: The Grand Canal project, which would like the Pacific Ocean to Lake Cocibolca along one of six alternative routes. The Ortega government has been shopping the project around to Russia, Venezuela and whoever else will listen, but without any clear commitments for funding.
There are studies indicating that an alternative canal across Nicaragua would be competitive, given the amount of transoceanic container traffic and the shipping lineup to cross the Panama Canal, which is undergoing a $5 billion expansion.
Chávez also clearly wants a canal and parallel pipeline to move his country’s oil across Nicaragua to the $3.9 billion Venezuelan-funded oil refinery that’s being built slowly in León, with plans to one day export ALBA oil to Asian markets.
But despite the fact that the canal is a linchpin in the Sandinistas “supreme dream” plans, it’s still unclear who would foot the bill for such a project.
According to a 2006 study by the Government of Nicaragua, the Grand Canal across Nicaragua would cost $18 billion—less than their previous estimate of $26 billion. Either way, Nicaragua appears to be about $18-26 billion short on funding.