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Panama versus the world

Tuesday, August 5, 2014


 

The Panama Canal faces another challenge to its dominance as Latin America's inter-oceanic waterway.

Workers' strikes and contractor disputes have delayed its expansion project until next year.

Rumors of a Nicaraguan supercanal, as well as shipping firms opting for alternative routes are other headaches.

Now the Chinese government has agreed to help build a railway that links the Atlantic and Pacific Oceans from Peru to Brazil, following a tour last July to Argentina, Brazil, Venezuela and Cuba by President Xi Jinping.

Plans for the railway were confirmed last September after an agreement between Peru, Bolivia and Brazil, aiming to boost trade as well as give land-locked Bolivia access to the sea.

The announcement comes one month after Nicaragua unveiled the route for its proposed $40-billion canal.

The China-based consortium in charge of building the canal, HKND, said the waterway will be 278 kilometers long, of which 105 kilometers will be through Lake Nicaragua.

The project also includes works that HKND says are essential to for the canal – a Caribbean port, a Pacific port, a free trade zone, a tourism complex, a new airport and new roads.

For its part, Maersk, the world's biggest shipping company, last March announced that it would switch from the Panama Canal to Suez, which can handle bigger ships.

In addition, Panama Canal fees have tripled in the past five years to $450,000 per passage for a vessel carrying 4,500 containers, said Maersk CEO Soren Skou.

Panamanian officials last May cut their 2015-2018 forecast of earnings from the canal by $2.6 billion.
The canal, which this year celebrates its 100th anniversary, handles 6 percent of the world's maritime traffic.