Slashdot Mirror
With Chinese Investment, Nicaraguan Passage Could Dwarf Panama Canal
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.
France, US, Columbia, and Panama. Jungle diseases of workers was a huge problem at beginning.
I think you might want to review your history. The first French attempt under La Société internationale du Canal interocéanique almost brought France to its knees. It also was in large part responsible for a disturbing wave of antisemitism that swept France, as Jews were blamed for so much of the corruption.
A Nicaragua canal would in many ways be better than a Panama canal. Although the distance is quite a bit longer, there would be less of a need for locks than are used on the Panama canal.
Hoist Number One and Number Six.
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.
mfwright@batnet.com
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'm totally just guessing here, but perhaps it's only communist for those who can't afford to grease the right palms...
Because China has a wonderful record on industrial pollution, and Central America has a wonderful record on fiscal responsibility and accountable government.
I want to delete my account but Slashdot doesn't allow it.
It's a one party state where that one party is the Communist Party.
In 1978, Deng Xiaoping started economic reforms that transitioned China from a Maoist country full of subsistence farmers to the economic powerhouse it is today. To be truly Communist, the state has to own pretty much everything. Their new model allows individuals to own lots of things, and profit from them, but the state retains control when they want it.
That just sets you up for the obvious "so it's just like US?" finisher :D
.
China has poured 47% more concrete in the last 3 years than the US has poured in the last century. They know how to build.
The Panama Canal was dug around 1910. In 1910, about 38% of Americans were employed in agriculture... now it is under 2%. In other words, humankind is radically better at things like "moving dirt." There is no comparison.
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.
Maw! Fire up the karma burner!
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.
Panama didn't have the benefit of the massive machines available now. It will likely be much cheaper compartitively.
We are also much better at dealing with tropical diseases. Malaria and yellow fever were major problems during the construction of the Panama Canal.
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.
and it did Bankrupt the French. I hope everyone has read "A Path Between the Seas"
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.
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.
My other signature is a car
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. http://en.wikipedia.org/wiki/N...
Plus the amount of money to be made will be less as you already have Panama canal. The average price will fall which will reduce Panama canal's profit but for them there is not much cost involved and hence the impact will be minimal. However, the lower rate can bankrupt Nicaragua canal. I wonder if they are self financing or are they able to get debt for such a risky project.
Doesn't have the same ring to it. I can see why they picked Panama for the first one.
Well at the time they were using the most massive equipment available to the point that a whole new class of steam shovels was created specifically for the project. They were rail mounted 105 ton (US tons and that is the vehicle weight not capacity) steam shovels. You can see one of the 6 prototypes for the project here. It has a 2 1/2 cubic yard bucket instead of the original 5 cubic yard one (changed because the iron ore was substantially denser) and was also converted to crawler tracks to run in the iron mines of northern Minnesota but is the only remaining one of the prototypes. While this shovel never worked on the Panama Canal the only other surviving example of this type of shovel that may have is in much worse shape and exists in upstate new york. They were built on a 40' railroad box car which houses the boiler with an additional 8' added on to the back for a coal hopper with the boom and arm attached to the front.
Time to offend someone
The Panama canal nearly bankrupted America.
Nonsense.
The Panama Canal cost Americans around $375,000,000, including the $10,000,000 paid to Panama and the $40,000,000 paid to the French company. It was the single most expensive construction project in United States history to that time. Fortifications cost extra, about $12,000,000.
Amazingly, unlike any other such project on record, the American canal had cost less in dollars than estimated, with the final figure some $23,000,000 below the 1907 estimate, in spite of landslides and a design change to a wider canal.
Even more amazing is that this huge, complex and unprecedented project was carried out without any of the scandal or corruption that often plagues such efforts, nor has any hint of scandal ever come to light in subsequent years.
There was, of course, also a cost in lives. According to hospital records, 5,609 lives were lost from disease and accidents during the American construction era. Adding the deaths during the French era would likely bring the total deaths to some 25,000 based on an estimate by Gorgas. However, the true number will never be known, since the French only recorded the deaths that occurred in hospital.
END OF THE CONSTRUCTION
ooo pretty. thanks to you sir i now wish to visit a cathedral in nicaragua.
The guy who said the election was rigged won the presidency with the second-most votes.
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.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
No, most of that concrete went into infrastructure projects. in the space of a decade China laid down a modern "interstate" highway system tremendously larger than the entire US Interstate and US HWY highway system combined.
They did this because they knew, from looking at history, of the power of massive public works/modernization projects. Particularly a modern highway system. This project both spurred economic growth in its own right from the labor and materials required, and will spurr further growth through time as it begins to allow the same things we saw happen in the US. Manufacturing can be located even further inland. It can also specialize into sub-assemblies that go elsewhere for final assembly. It' easier to transport goods, services, and people now into the interior of China. This will and has spurred the movement of people seeking better opportunities, and promoted growth of cities further inland, in contrast to past history where most of China's economy and trade depended on access to and was oriented around sea ports.
I only point this out, because while they tackle the problem of modern infrastructure, we're kicking the can down the road repeatedly, only doing small things after bridges have already collapsed, and roads become nearly unusable. that new "infrastructre bill" they just passed that was supposed to fund the HWY fund for a little longer? It's actually a loan from private businesses that will be repaid with tax dollars, at a profit to the businesses, a few years down the road. It's absolutely shameless.
The guy who said the election was rigged won the presidency with the second-most votes.
The lake they plan to use is above sea level. They would need at locks on either side of it to use the lake.
Fortunately, though, both places tend to look out for the interests of their people. ;)
Hmm, maybe they should re-direct some of that construction overcapacity to something more economically useful, like a new canal to reduce shipping costs to western markets.
The Panama Canal is being expanded to handle larger, "Superpanamax" ships. This Nicaraguan one will handle larger still.
The US has raised the value-judgement on environmental issues so high, there are literally several harbors in the US that have been fighting legal battles to merely deepen them by 5 feet to handle Superpanamax (and not even the even larger Nicaraguan ones) for longer than it took to build the original Panama Canal.
I will be modded down by censors, but it needs to be said again and again: environmentalism has taken over from good old fashioned corruption of officials (get in the way to be paid to get back out of the way) as the grinding drag on modern society.
The economy does not care why government chooses to get in the way of anything that moves, only that it does.
I, for one, welcome our new Chinese overlords. The nation that keeps trade routes open prospers; the nation that turns to lording over its own people falters.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
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.
Good people go to bed earlier.
Because he was being snarky while adding nothing to the discussion.
"Because China has a wonderful record on industrial pollution"
And this will affect the financial success of the project how? Grandparent's point was that technological advances since Panama Canal will make the project more cost effective.
"and Central America has a wonderful record on fiscal responsibility and accountable government."
Except it's the Chinese footing the bill and making the decisions, so this comment is irrelevant.
He's just pandering to Slashdot groupthink and bashing China pollution and Latin American corruption. And it worked too, currently at +5 insightful.
The new canal won't compete with the Panama one, because it's wider. The larger ships will have to take the new one (at full fare) while the smaller ships can choose. Given that it's cheaper to use larger ships that means the Panama canal will see a massive drop in use.
*every* communist country had enormous differences in wealth between their citicens. Compare the members of the Soviet nomenclature (who had even special shops with Western goods) with the Gulag-slave. (More than 10% of the population were Gulag-inhabitants, so we are talking about a large segment of the population here.)
A little known-fact was that the income differences in East Germany were about the same as in West Germany - but only when you assume that the people had equal rights which of course they hadn't. When you take all the privileges/penalties into account the differences were much greater than anybody in the West can even imagine.
We have had several exchanges with Chinese government officials that do much the same things we do. There are some fundamental differences. No one owns land in China, it is all nationalized. However you are able to get a lease, and things like an 80 year lease is common. Think your current lifetime, just don't think you get to pass your loot onto your kids necessarily, particularly if you abuse the resource. Here a lease is typically about 20 years.
Anyway the mechanics are much the same, it is the implementation and those differences that influence changes. For example, if I am using a piece of land for some purpose say a factory, or a farm, or whatever, and do a crappy job of it, once the lease is up, it probably will not be given to me again, but someone else who might use the resource better. If I own it, I can more less waste that piece of land however I wish. Same goes for control, land might be leased for a specific purpose and no other, where if I own the land I can more less do whatever I want. Which might be in my best interests, but maybe no so much anyone around me. On private land government still tries to exert some control in terms of zoning and the like but it isn't quite the same thing.
In a current example, I saw an "environmental group" whose concern was the loss of prime agricultural farmland in a centralized location to urban areas protest, lobby and win against a mining operation and successfully shut it down. However they did not ask that the land be protected by establishing long term zoning only allowing for agricultural use. The reason being that the group is really a land owners association, where farmers want to sell their land for millions to urban residential developers to create sprawling suburbs, which would more effectively destroy more farmland than any sized mine.
In the Chinese model the government would say FU, no more land for you, only if you plan to farm it! In ours, the farmland will get covered by 3000sq ft houses and forever be unusable. In our model land use and worth is controlled largely by market forces... i.e. close to urban area, worth X as farmland, but worth Y as residential, if up to individual, they will sell it to Y, as they get the most out of it. So China in a sense still has what used to be called a control economy, where land use and value is not wholly (or mostly) determined by market values, but by say a centralized authority that may decided having a quality farmland close to an urban area is worth more to everyone than simply a short term $$$ figure. That is not to say that it is totally without consequence, the same here with municipal governments trying to exert some control. Only that it is very weighed one way here, and another way in China.
... 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.
What if I do the same thing, and I do get different results?
I, for one, welcome our groupthinking overlords and call you out as a grumpy old pickypants!
Strange things are afoot at the Circle-K.
The new canal won't compete with the Panama one, because it's wider. The larger ships will have to take the new one (at full fare) while the smaller ships can choose. Given that it's cheaper to use larger ships that means the Panama canal will see a massive drop in use.
Which is why they are building a new canal in Panama that will handle the large container ships and supertankers. This project has been underway for some time.
Enigma