China planning Panama Canal alternative

By Chris Sleight14 February 2011

The Chinese government is reportedly in talks with the government of Colombia to build a 220 km rail link joining the country's Atlantic and Pacific coasts. Although the route would be three times longer than the Panama Canal and involve handling individual containers, initial studies say costs would not be too much higher and the link would be quicker than the canal.

The proposed Atlantic port would be Cartagena, and the proposal also includes the construction of a new industrial area to the south of the existing city to assemble part-finished Chinese exports.

Speaking to the Financial Times, Colombian president Juan Manuel Santos, said "It's a real proposal... and it is quite advanced. I don't want to create exaggerated expectations, but it makes a lot of sense."

He added, "The studies the Chinese have made on the costs of transporting per tonne, the cost of investment, they all work out."

Some estimates put the cost of the scheme at US$ 7.6 billion. However, its viability has been questioned by critics who point to the Panama Canal's current US$ 5.25 billion expansion programme, which will double its capacity and allow the passage of larger ships.

The proposed scheme is one of several projects being discussed between the Chinese and Colombian governments. At a more advanced stage is the proposed expansion of the west coast port of Buenaventura, and an accompanying rail link to promote the export of coal to China.

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