How Ecologically Viable is the Nicaragua Canal?

^ Proposed Routes of the Nicaragua Canal Image Courtesy of Soerfm ~ Retrieved from

Vague Feasibility

Support operations for building the Nicaragua Canal started in December 2014. Finally! Plans for the canal have been in the air for five centuries now and umpteen brave-hearts (or over-enthusiasts) have made over seventy attempts.

Political opposition, technological constraints, economic shortfalls, and difficult terrain ensured that none ever materialized. This might be about to change. Nicaraguan President Daniel Ortega expects the completed Nicaragua Canal to host 5% of the world’s maritime trade.

This is the first threat to the Panama Canal’s hundred-year-old monopoly in connecting the Atlantic to the Pacific, for the Nicaragua Canal can accommodate mega ships that are too large for the Panama Canal.

Estimated to cost a mind boggling $50billion, the canal promises much needed employment and economic development in Nicaragua, Central America’s poorest economy. But will they succeed this time? Prospects don’t appear very bright.

Speculation abounds that the Chinese Government is the real financer of the Hong Kong Nicaragua Canal Development Investment (HKND) that is building the canal. And HKND’s silence strengthens this perception.

Panama Canal Image Courtesy of Peter Hermes Furian at Retrieved from

Panama Canal
Image Courtesy of Peter Hermes Furian at
Retrieved from

Superpowers can ill afford the luxury of another power spreading tentacles in its backyard. The United States cannot and will not tolerate expanding Chinese clout in the region.

Then there is the unrealistic 2020 deadline. And the question of whether there is enough shipping traffic for a canal that is larger than the expanded Panama Canal but operates parallel to the latter. Finally, there is the financial feasibility after the canal goes operational.

A recent social and environment impact assessment by London-based consultancy Environmental Resource Management (ERM) raises serious concerns on the potential damage the project could inflict on the environment and the 30,000 affected people.

And as if these troubles were not enough, the Chinese stock markets woke up on August 24, 2015 to take their largest single-day plunge since 2007. The hits just keep on coming.

Historic Duels

Ever since United States President James Monroe issued the famous Monroe Doctrine in 1823, the U.S. has been the preeminent political player in Central and South America.

Lake Nicaragua Image Courtesy of Rudyologist Retrieved from

Lake Nicaragua
Image Courtesy of Rudyologist
Retrieved from

It said the U.S. will view European efforts to colonize or interfere in North or South America as acts of aggression against the U.S. However, the doctrine also assured the Europeans of the United States’ non-interference in existing European colonies.

A theater of rivalry between the U.S. and the Soviet Union during the Cold War era, Latin America is once again turning into a battleground as larger powers vie for position and influence.

Now there is a new player, China. And perhaps the most potent manifestation of the rising influence of the Chinese dragon is the Nicaragua Canal.

By the way, the French had first chosen Nicaragua, not Panama, for building a canal to connect the Atlantic and the Pacific. Eventually they opted for Panama because the Panamanian Railway that could transport men and machines to build the canal went operational by 1885.

And it was the proposed construction of the Nicaragua Canal in 2006 that goaded the Panama citizens to vote overwhelmingly in favor of Panama Canal expansion in a referendum. Rivalries do indeed go back a long way!

Social & Environmental Specter

HKND commissioned the study by Environmental Resources Management (ERM). ERM suggests that the HKND and the government of Nicaragua must finance the solutions for the serious flaws in the project.

Augusto Caesar Sandino Image Courtesy of Underwood & Underwood Retrieved from

Augusto Caesar Sandino
Image Courtesy of Underwood & Underwood
Retrieved from

For one, ERM believes the five year deadline is unrealistic and capable of generating logistical, procurement, and workforce nightmares. It also recommends the Nicaraguan government to verify HKND’s compliance with international standards before construction begins.

Perhaps the gravest concern is the lack of transparency. ERM asserts that the HKND did not share vital information on the impact of the project with the to-be-affected people.

And there are many such effects to speak of. The canal will endanger one million acres of pristine rainforests known for rich biodiversity. It also hampers the free movement of animals. This limits the interactions in the ecosystem so essential for conserving the environment.

Dredging Lake Nicaragua, the largest freshwater point in Central America, is an ultra sensitive operation. Dredging it from its current average 15m depth to 27m will destroy water quality. This will generate 4.5billion-m3 of sediments that bode ill for the surrounding wetlands.

Then again, the canal goes through a route prone to hurricanes, earthquakes, and volcanoes that will easily disrupt traffic for days on end. Sailing ships will introduce invasive species to further depreciate water quality.

When complete, the canal could provide the Chinese with excessive influence over the Nicaraguan economy. Courtesy: over generous contractual terms for the HKND.

This brings back memories of Augusto Sandino’s armed resistance in 1927 against the U.S. plan to build such an inter-coastal canal. Sandino was not against the canal, but he opposed the transfer of sovereignty over the canal’s territory to the U.S.

The Brighter Side

Construction operations in themselves will create 50,000 jobs. Along the canal will be two ports, a free trade zone, an international airport, and a holiday resort. These will generate 200,000 jobs after construction.

Next, the canal promises to double Nicaragua’s economy and emancipate 400,000 from poverty by 2018. For a country with a paltry $11billion GDP, this means a lot.

Being larger than the expanded Panama Canal, the Nicaragua Canal can accommodate 20,000TEU vessels. Some sources place this capacity at 23,000TEU. The expanded Panama Canal will allow vessels of 13,000TEU only. Many however doubt the need for such a huge canal.

Already, Nicaragua is losing forest cover rapidly. The canal cannot make it worse. Instead, a part of canal operations can be directed towards forest conservation as is done around the Panama Canal.

Comparing Strategic Transit Channels

Canal Length (km) Width (m) Depth (m)
Nicaragua Canal 278 83 28
Panama Canal 77 55 18.3
Suez Canal 194 60 24

Nicaragua and Panama have similar natural habitat, climate, and social equations. And both canals use locks or chambers to first raise ships to about 30m above sea level before lowering them again at the other end.

Most of Panama today is farmland created after felling forests. The area around the Panama Canal is however thickly wooded because it was closely guarded. There is no reason why the same is not possible around the Nicaragua Canal.

HKND promises to institute the following measures to mitigate the ecological impact in what it describes as the largest earth moving operation in history:

  • reforest watersheds along the canal
  • construct two rock-wall islands inside Lake Nicaragua to temporarily store the excavated material
  • utilize the excavated mud to establish 72,000-96,000 acres of farmland
  • build a 10-kilometer no man’s land in the Mesoamerican Biological Corridor

And although he faces opposition at home from civil society groups, Daniel Ortega enjoys considerable support for his canal venture. His non-transparent ways however do leave something to be desired.

The Verdict

A project of such epic proportions always attracts its share of controversy. Construction of the Panama Canal too entailed similar excavation and forest felling. Today, the area around the canal is greener than the rest of Panama.

China might be using infrastructure projects as an instrument of foreign policy to control energy resources for the future. But then, nations are not saints. They are shrewd players in the never ending game of politics and business.

And the fact that the ERM report has delayed the construction to early-2016 is great news, as concerns can be sorted before work begins. For ERM warns of the worst case scenario – work begins but is not completed, the initial damage is done but the gains don’t materialize.

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