Over a century ago, Nicaragua lost its initial competition with Panama to be chosen as the location for a canal that would connect the Atlantic and Pacific oceans, dramatically changing global sea-lanes and supply chains. But Nicaragua's luck could be about to change. In July 2012, the Nicaraguan government established the Nicaraguan Grand Interoceanic Canal Authority, and in June 2013 the National Assembly granted Hong Kong-based HKND a 50-year concession, giving the firm exclusive rights to plan, design, construct and operate the canal. An ambitious schedule set the project's completion for 2019 and the commencement of operations for 2020.
Nicaraguan officials report that construction of access roads began in December, but a number of obstacles, including a possible lack of funding and potential pushback from the Nicaraguan community, could jeopardize the entire project. If construction does continue, it will likely encounter numerous delays and cost overruns that would almost certainly prevent the canal from coming online by 2020. Although the Grand Canal would offer an alternative route for shipping traffic if it is completed, it would also be in competition with existing routes, leaving the long-term economic viability of the canal uncertain. The project, led by Chinese investors and operators, is in Beijing's long-term interest of expanding control over sea-lanes and establishing alternative trade routes that are not controlled by the West.
The chosen route begins on the Pacific coast at the Brito River, crossing Lake Nicaragua before traversing the isthmus to the Caribbean coast at the Punta Gorda River. The planned canal runs a total of 278 kilometers (around 173 miles), 105 of which will cross directly through Lake Nicaragua. The channel is to be constructed to accommodate large ships, with a width of 230-520 meters and a depth of 27-30 meters. Plans also include two sets of locks, a dam and an artificial lake. River crossings along the route will require substantial dredging, both during the initial construction and for ongoing maintenance, a costly but necessary aspect of the operation.
HKND plans to have the new canal completed by 2019, but this goal is unrealistic. Feasibility studies conducted on previous canal proposals indicate that construction would take closer to 10 years, rather than the projected five. But publicly available information on the details of the canal's funding and construction remains limited. Given Nicaragua's long history of false starts and subsequent failures, it is possible that the Grand Canal project will simply be the next in a long line of disappointments. And yet signs of progress continue to be seen, raising the possibility that this project could be the attempt that is ultimately successful. Still, as long as the Grand Canal project is shrouded in secrecy, uncertainty will remain.
