Disclaimer, I'm part Panamanian, that being said, I find this highly suspicious. A lot of my Nicaraguan friends are also highly doubtful this will ever take off. The big problems for Nicaragua with this are:
- Horrible ecological impact (fisheries in Caribbean are already [1]
- Many think this is an excuse for the politicians to get cushy land/resort deals along the proposed route and near the entrances to the canal [2]
- Some think it is really never going to materialize, but Chinese owned resorts will pop up on each end.
- Nicaragua doesn't have the infrastructure to undertake such a big engineering project (human talent, electrical, etc)
- The public hasn't had any say in this so far [2]
I've been living in Panama since 2006. I've followed a lot of the articles around the Nicaraguan canal to try to get some sense of how it will affect Panama.
My conclusion is a canal in Nicaragua makes no economic sense, there must be some hidden motivation at play here, such as personal glory for Wang Jing or a ploy to secure land rights and tax exemptions. The reasoning is as follows:
1) The possible ROI from a ~$70 billion investment is very low. The same revenue can be achieved by building a third set of locks in Panama for ~$15 billion. Right away it looks like bad business. Most ways you can spend $70 billion will yield a better return with less risk.
2) The Chinese government is not involved. If it were a political thing, it could explain why someone would forge ahead despite the poor ROI, but the government is not financing it and government companies won't touch it with a stick.
3) Wang Jing is a telcom billionaire and neither he nor his company have any experience with construction or engineering.
4) A Chinese construction and engineering company has offered to finance and build a fourth set of super-sized locks in Panama for ~17 billion. This would compete directly with a hypothetical Nicaraguan Canal for the largest ships, but at a much smaller investment.
Given two nearly identical products, the company with lower costs will be able to offer lower prices while still making a profit. That will clearly be Panama. There's just no logic in the Federation's move here. Jorge Quijano, who leads the Panama Canal Authority, has come to the same conclusion.
My wife is Panamanian and having just recently traveled there I got the same impression. I was asking everyone about it and they held the same opinions to yourself.
It's also worth noting that the reason the canal was put in Panama over Nicaragua was due to earthquake activity which Panama did not have.
Not the main reason. As always, politics really ruled with US-Columbia relations factoring in heavily (Panama was a province of Columbia early on in planning), as well as the existing US-owned Panama Railway.
There was a good documentary on PBC about the canal recently, the US basically staged a coup for Panama to gain independence from Columbia and in return got their Canal Zone
- Horrible ecological impact (fisheries in Caribbean are already [1]
- Many think this is an excuse for the politicians to get cushy land/resort deals along the proposed route and near the entrances to the canal [2]
- Some think it is really never going to materialize, but Chinese owned resorts will pop up on each end.
- Nicaragua doesn't have the infrastructure to undertake such a big engineering project (human talent, electrical, etc)
- The public hasn't had any say in this so far [2]
1. http://e360.yale.edu/feature/nicaragua_canal_a_giant_project...
2. http://www.csmonitor.com/World/Americas/Latin-America-Monito...