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Construction Corner: World’s biggest civil engineering project still in limbo

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by Korky Koroluk

It flew under the radar of the mainstream news media, but late in March the Nicaraguan Supreme Court cleared the way for construction of what some are calling the world's biggest civil engineering project yet.
Construction Corner: World’s biggest civil engineering project still in limbo

The court turned down the last environmental claim delaying construction of the Interoceanic Grand Canal, which is to link the Pacific Ocean on the west to the Caribbean Sea to the east, a 273-kilometre channel through the small Central American country of Nicaragua.

The Panama Canal finished a major upgrade just a couple of years ago and its enlarged locks can now accommodate larger ships. The retrofit doubled the canal's capacity and although busy, it's able to handle the traffic, so there is no real urgency about the Nicaraguan project.

But Nicaragua is an impoverished nation that desperately needs new revenue streams. That's why it struck a deal in 2013 with the Hong Kong Nicaragua Canal Development Investment Company (HKND). The agreement grants HKND a 50-year concession to finance, build and manage the project. Once the waterway is operational, the concession can, at the discretion of HKND, be extended for a further 50 years.

Opposition to the proposal was both loud and immediate. There have been charges and countercharges over what some say was a badly flawed environmental assessment. There were court challenges that, inevitably, ended up in the country's Supreme Court.

But although the way has been cleared for construction, journalists visiting the area report that nothing is happening. No surveyors, no equipment, no workers. Nothing.

What happened?

Wang Jing, a Chinese billionaire, is both the brains and financier of the project. But he is said to have lost much of his fortune when the Chinese stock market crashed two years ago. The Nicaraguan government has apparently been unable to find other financing so there is doubt about whether the canal can be built.

It was supposed to be an economic lifeline for the small nation, bringing a lot of construction jobs, followed by the creation of all sorts of ancillary services once the canal was complete.

At a cost of about $50 billion, the canal would be three times as long and twice as wide as the Panama Canal. But there was opposition right from the start.

Much of it centred on Lake Nicaragua, which is the country's main source of fresh water. About 100 kilometres of the canal would be through the lake. A channel three times the lake's existing depth would have to be dredged through it. And that, it was argued, would irreversibly alter the aquatic environment and endanger the water supply for much of the country.

As world population grows, there is more demand for trade goods and every year there is more freight moving through both the Panama Canal and the Suez Canal. Both have undergone recent upgrades.

While all this has been going on, there have been negotiations for two other mega-canals. One would carve a channel through an isthmus in southern Thailand. It would let ships avoid the congested Straits of Malacca, where piracy is a persistent problem.

The other would connect Russia's Caspian Sea with the Persian Gulf after cutting through Iran. If that one ever gets underway, it will be about 1,400 kilometres long, with more than 50 massive locks lifting ships over rugged mountains that lie along the south end of the Caspian.

But another big idea might get in the way. The Korea Railroad Research Institute has come up with an idea for "dry canals."

These would be really heavy-duty rail lines capable of carrying ships — large ocean-going ships — across land barriers like the isthmus of Panama. They could be built, researchers say, for about a quarter the cost of a canal. It is a sad irony that there has already been a proposal to build one of these dry canals in Honduras, just north of Nicaragua.

Korky Koroluk is an Ottawa-based freelance writer. Send comments to editor@journalofcommerce.com.

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