Nicaragua weighs rival canal

SAN JORGE, Nicaragua — Nicaragua wants to build an $18 billion alternative to the increasingly overloaded Panama Canal.

Officials are drafting legislation, conducting feasibility studies and lobbying internationally for the project. The idea is gathering pace as Panamanians hold a referendum Sunday which polls predict will approve widening their 92-year-old canal. But Nicaraguan officials insist there's enough traffic to sustain two waterways, and theirs would be able to handle bigger ships.

It would be 173 miles long. From the Caribbean, it would run along the San Juan River, which forms Nicaragua's southern border with Costa Rica and drains into Lake Nicaragua. From the western side of the lake, 12 miles of canal would be built across the Isthmus of Rivas to reach the Pacific.

Other river routes to Lake Nicaragua also have been proposed, as well as the possibility of a coast-to-coast railroad.

Nicaragua's outgoing president, Enrique Bolaños, says a canal could be built in 12 years and would open the way for giant tankers from Asia that cannot squeeze through Panama's 50-mile waterway. The Nicaraguan option could cut a day off shipments between California and New York, while Chinese tankers could save as much as 36 days and $2 million on their round-trips to the U.S. East Coast, Bolaños said.

He made his pitch to the Western Hemisphere's defense ministers, including U.S. Defense Secretary Donald Rumsfeld, in Managua this month.

Daniel Ortega, the Sandinista leader who is the front-runner in the Nov. 5 presidential election, is on record as backing the plan, though he says he wants to study it further.

About 5 percent of the world's maritime trade crosses through the Panama Canal, but its growth is limited: 10 percent of the world's ships are too big for it. Others wait in long lines, losing time and money. And Bolaños estimates the shipping business will grow by at least 5 percent annually until 2025.

Nicaraguan officials claim their canal could take 275,600-ton container tankers and ships — more than double what Panama will be able to accommodate even after expanding.

They say the mammoth engineering feat will depend on public financing and international investors, including banks in China and Japan, countries that would benefit from quicker, cheaper shipping to the West.

Nicaragua's canal commission plans to present proposed legislation for the venture in coming months.

Environmentalists worry about the impact a Nicaraguan canal would have on wildlife, vegetation and indigenous people, while Nicaraguan authorities believe the benefits would be a doubling of gross national product and at least 150,000 new jobs.