In what would be a great engineering feat, plans for a canal to connect the Atlantic and Pacific Oceans in Nicaragua have been finalized. The idea of a Nicaraguan canal goes back to the 19th century, when officials in the United States looked into the feasibility of a canal project. Nicaragua ended up being passed over when Panama was chosen as the site for a trans-oceanic canal by Congress in 1902. After the Panama Canal’s construction, talks of a Nicaraguan canal died down until the early 21st century. With increasing world trade and the need for quick shipping, the idea of a second canal connecting the Atlantic and Pacific Oceans was proposed by the Nicaraguan government.
A decade since the government’s proposal for a canal, the plans have officially been laid for the massive project. The planned route, which is three times longer than the Panama Canal, is priced at $40 billion, almost four times Nicaragua’s annual GDP. Construction is expected to begin this December, and according to plans, the canal should be finished in 2019. Some outsiders are not convinced these projections are accurate, pointing to the Panama Canal’s expansion as an example of how easily these projects can run over budget.
If a second trans-oceanic canal is indeed built, the impacts on global trade would be significant. The second canal would be able to handle even larger ships than the expanded Panama Canal, increasing efficiency for shipping companies while also lowering costs, as the Panama Canal would have a competitor for business. The Nicaraguan government has said that the plan for their canal is to complement, not compete with the Panama Canal, by enticing ships that currently sail around South America or through the Northwest Passage because of costs and wait times in Panama. Either way, a second canal would help to increase efficiency in global shipping, lowering prices for businesses and consumers who rely on foreign products.
The planned canal’s biggest impact would be on Nicaragua and its economy, the second poorest country in the Western Hemisphere. The government has touted the canal as a job creator that would help many of the country’s impoverished citizens, while also bringing international business to several of the country’s ports. While the government has been very encouraging about the project, many skeptics remain. The shear cost and amount of engineering that will have to go into the canal could become problematic during the construction, and if the project is delayed or stopped, the Nicaraguan economy could be negatively affected.
While many questions remain about the project, the plans are now finalized and construction is set to begin in six months. The project is somewhat of a gamble, but if successful, could be a big help for Nicaragua, shipping companies, and customers around the globe.