Canal is law!

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Believe it when I see it...

I remember sitting at the Hotel Alameda, Granada in 1999, looking at the plans for this canal...never happened.

Call it progress

The idea of the canal goes back before the Panama canal. At various times since the canal has been considered and rejected. Times change and governments change. Todays ideas seem a lot better than pervious ones -- in current world needs, in ownership structure and likely structure of the canal itself.

Will it happen? Who knows but the plans are looking pretty realistic so far.

One of the things that makes places wealthy are seaport

A trans-ocean canal would be the equivalent of two seaports. I hope it happens -- good technical jobs for people, chances for developing more port infrastructure on both coasts.

Rebecca Brown

Answer to Jose

So what...doesn't mean this time it won't happen.

If you look at the cost of a deep water port at Monkey Point versus the canal and a different port structure on both sides and including the lake (for Managua drop off and pick up) it starts t look like a better proposition.

Add into the mix the types of countries that could benefit from the canal and the project deserves studying in the context of the next 100 years not the last 100.

Monkey Point

DOA if Canal agreement signed with real money. Only country I see on the so called 'potential investor' list that could build the canal is Japan and they are busy rebuilding from the tsunami. As was described in previous posts the canal as a business from ROI standpoint is a loser. Spending 40 Billion US Dollars to get at most 1B in revenue per year (this is liberal number as Panama canal does not take this much revenue annually now) makes no sense. Costs a lot to run with thousands of employees and who knows what the construction costs would be in the end. But having this canal would change the country and spur growth as never before in its history. Just copy the benefits in Panama with the Free Zones-basically a dumping ground for products from around the world bought and sold with no taxes. So you would have one over in RAAN and one by Rivas. Much of what Nicas buy comes from Colon-most of the textiles, electronics, etc is coming in large scale and small scale. I know a few Nicas who make living taking a bus to Colon (18 hours) filling 2-3 suitcases and returning to Nicaragua. They know what to buy and my lips are sealed. Would also help get the PCH going which would change the whole Pacific coast. Need to get the land issues settled once and for all on that side with the titles and legacy issues. A canal would accelerate that.

Panama Canal revenues

Mark, I think your revenue numbers for the Panama Canal are off. Quick google check shows 2010 revenues were approximately US$2 billion with net revenue approximately US$1 billion.

Just an FYI -- I agree with you that this is just another wet-dream of Ortega and his ilk. To think that opening a Nica canal would "open new trade routes" is farcical on its face.

Monkey Point was an interesting case. Danny-boy actually had some Iranians show up there -- the Indians ran them outta town! Or as we say on the right coast of Nicaragua -- they boxed their ass.

New Trade Routes

As I wasn't awarded the contract I don't intend to do all the research but a given is that using a canal across Nicaragua rather than Panama cuts about 500km off the distance between any two ports north of Nicaragua. With about 5% of the world's shipping going through the Panama canal, it seems like there is room to expect reasonable volumes and, yes, new trade routes.

To take an obvious example, Dole has a huge port in Limon Costa Rica. Huge volumes of bananas are shipped to Miami. With a canal north of Costa Rica, shipping to the US and Canadian west coast becomes practical.

You can like or dislike the Nicaraguan government but that is quite a different subject from the potential of the canal.

Farce, Part II

Dole. Evil savage capitalists.

Can you present a business model that would have Dole transship bananas from Limon (where the bananas grow) to the west coast of Nicaragua? Do you have ANY idea of the margins of the banana business? Did it ever occur to you that there are Pacific ports in Costa Rica and that, if profitable, Dole (evil savage capitalists) would already be doing significant tonnages of transshipments?

The only "new trade routes" would be the soon-to-die ALBA corrupt societies. That only lasts as long as tio Hugo and Fossil Fydel survive.

I know fact-based analyses are anathema here. Only 5% of the world's commerce passes through the Panama Canal. The wet-dream Ortega Canal would ONLY siphon off revenue from Panama.

And, in a truly human society, is that not unfair to our fraternal brothers in Panama?

[oh wait, they aren't our fraternal brothers. sorry tios Hugo, Evo, Hassan, Qadaffi ]

Okay Islander, I'll bite

Fact: Many of the same reasons Panama is expanding their canal also apply to a Nicaraguan one, i.e. increases in world shipping, ships too large for the canal, canal congestion, US West coast shipping congestion.

Fact: The Panama Canal gets 5% of world trade. The Suez canal has 7.5%. 70% of the trade traffic through the canal is with the US, the majority between it and Asia. The new canal(s) are expected to take traffic from the Suez.

Fact: During the high season, a ship can wait up to 10 days to use the Panama, costing up to $50,000 USD/day to sit idle. Congestion of the Panama canal is so high, they instituted a bidding system to jump the queue. The record price paid was $220,000 + transit fees. (Perhaps some competition would be good for consumers.)

Fact: With globalization, west coast US ports had a dramatic increase in traffic. More ships are using the Panama canal to avoid west coast port congestion.

Fact: Large container ships can't go through the Panama canal. They're unloaded, often distributing their load to smaller ships. Containers also cross Panama by rail. The 2005 world cargo container tonnage is expected to double by 2025.

Ouch!

Your bark is worse than your bite, methinks?

All true.

And???

You're still talking splitting the loads. No new trade routes (Cuba, Venezuela, whatever thugocracies the current illegitimate regime supports notwthstanding).

If there is a finite amount of capacity, opening another channel (canal in this example) ONLY divides the finite, it does not create new demand.

And I still say that taking from our non-fraternal brothers in Panama (even tho it is really Chinos) is somehow not right in a truly human society.

What's this

taking from our non-fraternal brothers? The original canal was supposed to be in Nicaragua, not Panama.

Fact: The Panama canal isn't currently satisfying all the demand. The new channel there will result in only a 50% increase in capacity that still won't satisfy demand.

The world container traffic is predicted to double by 2025 - that's not finite. As I said earlier, 70% of the traffic is with the US and its west coast ports are already congested. They want to redirect more of the Asian traffic through the canal to the east coast. For security reasons, they might even want to put less through the Suez.

Islander, where are your facts?

Islander....

Put yer spade down before you have that canal built.... :)

Hip-waders

I seem to re-call someone with a line on below market hip-waders? I can certainly use them from time to time, eh?

Numbers Are Real

as I pointed out in an earlier post. There IS capacity that Nicaragua could take and profit from IF:

1.) They can find someone acceptable to finance and build the canal; they have neither the money nor the technical ability. They DO have Eden Pastora in charge of the project, and he does have that dredge he was using on the Rio San Juan.

2.) They can run it better than they are currently running most of the country; if the project is riddled with corruption it will never get finished. I hope the investors don't mind a close haircut, a la Greece.

3.) They don't turn the project into a pissing match with the US.

What interests me most is the Panamanian reaction "WHAT, Me Worry?" They are completely unconcerned, "yes, a Nicaraguan canal would be great, plenty of business for everyone". The Panamanians DO hold a lot of cards: There canal is paid for; they can be anywhere they want to be on the price/demand curve. They have a lot of good friends, including a long relationship with the US. Still, the attitude is curious, like they know something the rest of of us do not.

Investors

International investors from Japan, China, Russia, Venezuela, Brazil and South Korea have expressed interest in contributing funds.

Do You Have

links on the investment interest?

I've been having a hard time finding anything substantive.

just to news articles

Nothing more than country lists: Tico Times - June 22, 4th paragraph.

try...

All the usual $andi propaganda outlets? Granma? World $ucialist Daily? Prensa Latina? Toni Solo's website? Pravda?

Ah, Yes, Pravda

Some really solid news for a change:

http://english.pravda.ru/business/companies/01-08-2012/121801-coca_cola_...

I DID NOT know that the Mayan calendar forecast the end of capitalism.

Couldn't find any Nicaraguan Canal info, other than a statement that Russia didn't have the cash for such a venture, and that Comrade Rafael Ramirez, who is representing Nicaragua in Moscow in an effort to find funding, is a "true communist". Talk is cheap, at least they can afford that.

Commies with money are an endangered species; perhaps Comrade Ramirez could talk to North Korea ??

Many Positives

Quality and level of education would have to step up to the plate; real jobs (but if they just go to unqualified Sandinistas as is now the case) ??; infrastructure would be greatly improved. That much money would make some big changes in Nicaragua, whether it buys shovels or just lines pockets.

Investors are going to ask the same questions the bank asks me when I want a new car. My ability to pay the money back, and my history of doing so, are the same criteria potential investors are going to apply to Nicaragua. Unlike my new car, it's tough to repo a canal.

Absent guarantees by a someone like the IMF, and the demand by Nicaragua for a 51% stake -which would allow the country to pack the NCA with political appointees and run it at a loss,- plus the reputation Nicaragua has for transparency in financial dealings, most big money is going to be nervous. Still, the celebrity status of owning an inter-oceanic canal may appeal to someone like Japan, or Brazil,, or Venezuela. $30+ Billion sounds like a lot but it's going to be spent over 10 years (or more likely, 15 ).

the sticky wicket

Is where would the Nic govmint get the cash for it`s 51 %? If it`s borrowed, that presents ROI problems. If it`s stolen, that presents credibility problems with legit investors. If it`s imaginary, that presents cash flow problems. If it is political payoffs from rogue oil states, that presents all kinds of problems. Monkey Point and a train make a lot more sense, unless one has dillusions of grandure and just has to have a canal. Or pipe dreams thereof.

"You can avoid reality, but you cannot avoid the consequences of avoiding reality." Ayn Rand

Cash?

Maybe I spent too much business time in the dot-com era but there is no way Nicaragua needs to come up with 51% of the cost in order to have 51% ownership. While the typical VC wants a controlling interest in your business, this is quite different from another software startup.

The first things which Nicaragua offers are:

  • The best and possibly only practical alternative route across Central America. This is something that cannot be bought.
  • Facilitation of the permitting process. That is, it is a lot easier for the government to get permits from itself than it is for an investor to get them.
  • Use of a lot of existing infrastructure -- both in making construction possible and decreasing the cost of getting into operation.

While $30 billion is a lot of money in Nicaragua terms, what is being built here is not for internal use. It is for world use. To put this number in perspective, the US invested somewhere between 30 and 130 times this much money in the Iraqi war "to keep the oil flowing" from one country. This canal should be a lot better investment.

There are many advantages to many different countries in having a canal without locks and, for many, a canal further north than the Panama Canal. Rather than replace existing trade routes, there is a lot of potential for new trade routes to be established because of a new canal. It is likely that these new trade routes/trade partners are going to be what drives investment.

Lockless?

Never saw any plan that was completely lockless. If this is to pass environmental standards of today there would have to be locks otherwise Rio San Juan would become a dry riverbed. So the preamble to build this probably would involve Costa Rica, International Courts thus more delays..

Biggest problem (after getting the money) is who to deal with. You have a government that is not legitimate in the eyes of many. But the FSLN has a stranglehold and they must be included. Is a mess that this country is so small and fractured. What currently exists-FSLN vs. 3 or 4 other fractured parties is in flux. For 300 years was Liberals (Leon Region) vs. Conservatives (Granada Region). During Somoza this grayed a bit but after the Communist try we have another layer of division. Not sure who speaks for this country.

Seems counter-intuitive but dissolving the Assembly would be the path of a dictatorship, However I am hearing rumors that Ortega may expand to over 1800! Filled with CPC no doubt. This would be like Obama signing Executive Order that the House be expanded from 435 to 6000 members. Obviously to pad with Democrats and a huge Power Grab verses individual US States power.

Who wants to partner with these guys?

As I remember ...

From memory, there are six possible paths. At least one is lockless, possibly more than one. Until the study is done (early next year) it is not clear which makes the most sense but the lockless approach certainly has some serious advantages.

I believe it is a Dutch company that got the contract to study the possible routes.

Who Is Paying

for the study?

I remember a number of $350 million.

Two Dutch companies

Royal Haaskoning DHV and Ecorys, were awarded a $720,000 contract by the Nicaraguan government for the first phase of a study.

i believe

that there has to be at least one lock because the Atlantic and Pacific are at different levels. Not a big problem-- one lock is less problematical than a whole series. Locks are old proven technology, they are just have more moving parts/ less dirt moving. I remember a zillion years ago they were proposing using underground nukes to break the rocks and facilitate construction. My how times have changed.

Environmental issues who have to be resolved or mitigated. This is much easier in a dictatorship than in a democracy --look at the big Chinese dam.

."You can avoid reality, but you cannot avoid the consequences of avoiding reality." Ayn Rand

Some Specifics

about the Panama Canal expansion:

http://www.panama-guide.com/canal/

that's great!

a second canal would benefit the region and Nicaragua. It`s probably something along the lines of a walk-on-water miracle that the Panama Canal has never been shut down by act of man or nature.

Too bad it going to be in a country without a democratic and transparent government that is courting enolvement from the rogue petro states.

And I suspect their estimates will be subject to the 100/300 rule: everything in Nic takes 100% more money and 300% more time than planned, not to mention the canal will have to be be shut down for holidays and political rallies.

"You can avoid reality, but you cannot avoid the consequences of avoiding reality." Ayn Rand

canal will have to be be shut down for holidays and ...

The canal would be an even better target for protesters than blocking the PanAm highway.

I was rather amused by how fast...

...the protestors were cleared out when they tried to occupy Sandino Airport recently. I suspect the canal would be getting that sort of treatment rather than letting them disrupt things for three weeks as they were allowed to do at Sebaco.

I think it would be good for the Nicaragua people if they can make it happen, but not so good for the ecology of Lago Colcibolca or the Rio San Juan.

Rebecca Brown

April

Historically the month of April was the month the "turbas" of the current regime took to the streets to protest whatever His Majesty paid them to protest -- usually something to do with whatever drew the most press in Granma, The World $ocialist Daily, etc. We would all avoid MGA like the plague in April.

Now, of course, any kind of protest opposed to the status quo of the cult of personality is immediately met with mano de hierro.

And, of course, Granma, et al, can point to the still-borne protest as "freedom of expression".

[Wh]Ortega, Somoza, son la misma cosa!

Everyone Needs A

dream.

Mine is to get rich growing coffee in Nicaragua. I'm looking for investors :)

Please PM me directly if you want to buy some of my coffee bonds. They are denominated in the new CA currency, the CUCU, but you can pay for them in dollars if you don't have any CUCU's handy. Subscription is limited, so hurry! Because of current international sanctions I cannot accept investment from Iran.

"....The bill details the Nicaraguan canal, by 2012 be controlling almost 4% of the global cargo total, and 4.5% by 2012, which represents just over 570 million metric tons ..."

SuperTramp anyone?

Dreamer, silly little dreamer, nothing but a dreamer...

Another in a series of "dreams" by this regime. Reminds me of the Great Bolivarian [wet] Dream Refinery in Puerto Sandino -- it's pumping out millions of barrels of derivatives each year, dontchaknow?

Unfortunately, those damned savage capitalists won't invest their hard-earned dollars into [wet] pipe dreams.

In a truly human society, we would just take all their money and p*iss it all away on our [wet] pipe dreams!

Breaking News

Aduana just announced that any and all import duties will be waived for import of . . .shovels.

Seriously. there is a market for a Nicaraguan canal. The engineering and construction burdens are a fraction of the Panama Canal: (PBS video down the page a bit); the health concerns that defeated the French no longer exist.

Being wider, deeper, and lock- less would expedite the ships' transit, and potentially accommodate the biggest tanker -and perhaps US aircraft carriers which will still be unable to transit the Panama canal, even after the upgrade.

http://dilemma-x.net/2012/07/14/nicaragua-plans-30-billion-interoceanic-...

The investment required is significant, but a fraction of what the US spent in Panama (in today's dollars). Venezuela, China, Brazil, would all benefit and are potential investors. Can the Ortega government - (given the questions of legitimacy, transparency and lack of any consistent commercial legal process)-- generate sufficient confidence to attract the investment?

From Inside Costa Rica: " . . . just imagine the possibility of corruption in Nicaragua with tens of billions of dollars floating around for the greedy to hijack. It boggles the mind and causes the knees to tremble! . ."

http://www.google.com/imgres?imgurl=http://www.abc.es/Media/201206/07/or...