Shipping industry experts have reacted with skepticism over the estimated US$100 billion Nicaragua canal project.
Rodolfo Sabonge, founder of Logitrans Advisory Services and former head of planning and marketing at the Panama Canal Authority said: “From a cost-benefit point of view, it is not sustainable. [However] it could be more sustainable for other reasons, more geopolitical,” according to The Loadstar.
Asaf Ashar, an independent port consultant who advised the Panama Canal on its expansion programme said: “I don’t think it makes sense.
“There is no cargo that can pay for that kind of investment. It would have to be paid by the container trade, which accounts for 60% of the traffic [traversing] through the Panama Canal.”
APM Terminals Latin America managing director Paul Gallie added: “[But] there is already a canal that can accommodate these vessels, the Suez Canal – and they are widening there, and it will cost a lot less.”
Much of the argument in favour of the plan revolves around the prospective ability of the canal to facilitate container vessels of up to 18,000 TEU, unlike the nearby Panama.
A Chinese concessionaire, Hong Kong Nicaragua Development (HKND) Group, has been awarded a 50-year concession to carve the 278km channel through the Central American country.
The Chinese businessman fronting the project, Wang Jing, has promised to start construction this year, after reportedly spending US$110m on studies that underline the project’s viability.
HKND Group is said to be in the process of finding investors to help finance the project.