HaskoningDHV: Nicaragua Canal comes one step closer

The construction of the frequently discussed Nicaragua Canal is getting closer. In collaboration with the Chinese construction company Hong Kong Nicaragua Development Group (HKND), the Nicaraguan Government has published the Nicaragua Canal route. The budget is estimated at €30 billion. According to Royal HaskoningDHV the probability of the project finding transit has significantly increased.

In 1914, the Panama Canal was built to provide ships with a shortened trade route. However, a lot has changed in the past 100 years. Ships have become larger, the number of ships using the waterway has exploded, and regional trade has increased sharply. In brief, the Panama has simply become too small to meet the current requirements.

Nicaragua Canal

The new-built Nicaragua Canal should serve larger ships than the Panama Canal, and thus form a second important waterway through Central America, with the aim to shrink the distance between the ports in Asia and North America and the East coast of South America.

The route that has been published by the Nicaraguan Government and HKND starts at the mouth of the Brito River south of the city of Rivas, will pass through Lake Nicaragua, and end at the mouth of the Punta Gorda River. The route is 286 kilometre long and 20 metre wide, with three locks of 28 metre deep and 83 metre wide, allowing bulk and container ships up to 250,000 tonnes to use the route. This is a great advantage over the Panama Canal, which allows ships up to 180,000 tons to pass.

HaskoningDHV and Ecorys

In 2012, consulting firms Royal HaskoningDHV and Ecorys conducted a research into the feasibility of the Nicaragua Canal. They were tasked to verify the budget, which was estimated between $ 20 and $ 30 billion, and to research the technical, financial and economic feasibility of the project. The Government of Nicaragua has chosen a different route than Royal HaskoningDHV and Ecorys recommended at that time. Instead of a canal along the border-river San Juan, they opted for another route, allegedly to avoid conflicts with Costa Rica. In the meantime, the route has been budgeted at €30 billion, and now that it has been published, the probability that it will actually be realised has increased. Wim Klomp, HaskoningDHV's Chief Advisor at the time involved in the feasibility study, cautiously told Consultancy.uk that the implementation of the route is "not impossible".

Economically viable

The realisation of the Nicaragua Canal is coming as step closer, and with the construction company HKND in charge of the construction, the route seems economically feasible. What the impact of this will be for China within Nicaragua is not exactly clear, but it seems to be a strategic choice of the Asian country. Currently, America has the most influence on the Panama Canal, and with this on world trade, yet the larger Nicaragua Canal would provide China the possiility of gaining ground.

State of affairs

The canal should be finished in five years, according to the plan, and its construction will create 50,000 jobs. Not only for the actual construction of the canal. In addition, two seaports, a duty-free zone, an airport in Rivas, and tourist attractions will be built. The earth that is excavated to realize the canal will be used to fill up islands in Nicaragua Lake.