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Author Topic: Nicaragua to rival Panama Canal  (Read 6338 times)
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Jens Boldt
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« on: June 14, 2013, 07:11:25 pm »

From the press today
http://world.time.com/2013/06/13/nicaraguas-chinese-canal-behind-the-audacious-40-billion-bid-to-build-a-rival-panama-canal/
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« Reply #1 on: June 14, 2013, 08:06:58 pm »

Hi Jens

One has to think differently to grasp what is really behind it. The "NEW" Panama Canal is already before completion to small for the biggest and newest mega-boxers (or obsolete because the mega boxer cost less to go other searoutes then to pass the new canal). The Panama Canal Authority made 2010-11 a profit of about 1 billion (milliarden) dollar, and since the handing over from the US to Panama 6.3 billion in 10 years.
Now Nicaragua, one of the poorest nations in that area of the world, gives a chinese company the ok to build a new canal to rival the PanCan. How big those locks must be,, when those new Mega-locks at the NEW PanCan are now already too small to accommodate the biggest boxers and as we know, bigger boxers are in the drawers of major shipping companies.
The way I see it, some politicans in that country will live one day in big luxurious retirement houses with no emptiness in their bank accounts, while the rest of the country will stay poor. Not to forget the companies involved which make for millions of dollars feasibilty studies.

What seemingly everybody ignores is that Nicaragua has now and then some nice earthquakes and rifts in the earth crust under the very same lakes where they plan to go through with the canal.
MY bet/view,,it,s skimming of the cream from the milk as long the dreams are alive and then the project will be on ice for a while, and may be even one day finished. Now it is said 40 billion dollars it will cost, in years hence, how much billions they have to produce yearly to make it a viable investment. Or does anyone think that China invests 40 billios for free into that project ? The Nicaraguan peoples will dearly pay for the now made decision (by the way pushed through the political channels in record time) by their now politicans which getting the oil they need donated by Venezuela at present to stay the political course. 

and finally
Does really anyone believe, if normal investment firms around the world would see money coming from building that canal, would since years turn down Nicaragua for the financing ?
This can be only done by a country as China who wants to expand its cloud globally and where
costs as in "investment-return" do not matter. I remember when in the 70,-80,s ,when the russian were big players in some of those countries (wherever they were, still now those countries are poor) and the talk came to the Nicaraguan Canal, they backed off.

there is a reason for that one could think


 
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Magogman
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« Reply #2 on: June 15, 2013, 04:42:50 am »

Very astute analysis Captain Ted, well worth reading.

Seeing is believing.

China has experienced some real problems in building infrastructure in Africa.  How well Nicaragua meshes with China will be interesting to watch.  As well as watching everything crumble during the next major earthquake.  Imagine huge container vessels trapped inland unable to get to the ocean.

This will be fun to watch.  I wonder if Las Vegas is offering odds and taking bets as to whether the project will come to fruition. 
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Kelvin Davies
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« Reply #3 on: June 15, 2013, 06:42:45 am »

Panama also has earthquakes. The Nicaraguan earthquakes have not occurred in the lakes; the latest 3 were centred in the Pacific. In 1972, there was an earthquake in Managua but there have been none in Lake Nicaragua.
What is behind is no doubt money & political influence.
Similar to the US mode of operation in the area for the last 50 years or more, except now it is China that has all the money.
Better to throw money away on a huge canal project than sending arms to the various factions in the area in order to win that political influence.
I don't particularly like the way the Chinese operate but the reality is that it is China that now has the cash stockpiles and, if they were to call in the IOUs, they would have another $2trillion from the US alone.
I am sure that, if they can pull it off, they will then operate a canal at a loss for a while, undermining the Panama Canal until they have all or most of that business.
That would be a shrewd investment.
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ozzy76
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« Reply #4 on: June 15, 2013, 10:45:54 am »

I'm surprised nobody has mentioned the North West Passage..Isn't the North Pole melting..Won't this allow ships to sail around the North of Canada/Alaska??   By the time it takes to build this...The pivot point will change to Canada in that case.
Maersk have already pulled out of the Panama Canal..Why would they be interested in this new Canal???  Only If it's cheap, they will.

I can't see this project happening,....And I don't think it's desirable, As it will pollute the Fresh water lakes, where the Country gets it's water..
And despite ,what everybody thinks water is a far more valuable commodity than OIL..Just ask Australia..Saudi Arabia ( Who send a fortune on de salination) and the farmers in the USA..Who recently suffered a drought.
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Tuomas Romu
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« Reply #5 on: June 15, 2013, 11:18:55 am »

I'm surprised nobody has mentioned the North West Passage..

Whereas the Northern Sea Route (Northeast Passage) is a shortcut between Europe and Asia - I sailed from Alaska to Norway in only 10 days - I don't see the Northwest Passage serving a similar function. I don't have a map at hand, but I firmly believe that the shortest route from the east coast of the Americas to Asia is via the canal(s). The Northwest Passage is probably only useful for transporting raw materials (oil, ore) extracted from locations along the route.

Also, even though we've seen record lows in Arctic sea ice coverage in the recent years, it does not mean that it's melting. There'll still be a lot of ice, meaning that you need either an icebreaking cargo ship (can be done) or an ice-strengthened cargo ship escorted by icebreakers (which both Canada and USA are not well stocked with...). Also, unlike Russia, Canada doesn't seem to be actively developing its Arctic seaways.

What concerns me is that the Chinese do not have a very good track record when it comes to preserving the environment. I hope the people of Nicaragua won't end up paying a high price for this project...
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« Reply #6 on: June 15, 2013, 01:39:03 pm »

@ Kelvin

It is of course a lot political matter involved or better said ONLY . But good that you mention the US since 50 years in that area and the chinese new. Just look around China,,all the countries in the Himalaya region and at the borders to China, Vietnam - N-Korea etc are in the hands or political clout of China. Is that for that matter better then the US in this area, hmmmm, Ask peoples south of the US if they would like to imigrate to China or US ?
So far I saw millions of them trying to get north, did not see anyone so far rattling the gates to get into China !!!!
Also when it is clear that the US don,t have the best tracking record in that area, the countries where they did something are mostly better off in general as if they were under (left influence, now China, before Russia) . Best excample: Venezuela, since taken over by Chavez and now his political party and closer and closer associated with countries like China/Russia/Iran it goes down the drain. All of that is covered of course conveniently by the oil money as well as buying the political good will in neighboring countries by means of free oil deliveries.

Also when West-Capitalism is for sure not the best form seemingly, but one thing everybody should by now realize, whereever left-wing and/or communist style countries were involved or established the general population were only in the beginning may be better off,,after that everything goes south.  Half Africa went south  because of it and all the countries in South and Central America which choosed , freely or not, to go that way are not really good off now either. Name one country in that area (or in the world) which thrived economy-wise while adopting a leftist government.  Does not exist, incl Cuba. (Not even the germans managed it, remember the former DDR ?)

Set politics aside, the whole nicaraguan canal project has economical wise no chance to
survive or ever to make money based on the investment amounts and one day when also the chinese getting tired of paying, the nicaraguan peoples are holding the bag in the end, and most probably will be a pretty empty one at that.
For the evironmental impact, really somebody believes that any government with the tracking record in that matter like China (look african countries or their own)and leftist government like Nicaragua, I think it will be safe to say that the enviroment will not be a winner in this project.



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ozzy76
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« Reply #7 on: June 15, 2013, 02:49:51 pm »

@ Ted The USA record in South America is appalling..No other word for it.
Paying for Death squads in Guatemala..San Salvador Peru etc.
 It's funny how the World remembers the American September 11th..But it forgets the CIA Sept. 11th in Chile.
Which placed the Chilean Pinochet dictator in power.

America is NO saint.. It's an Imperialist power..Just like the british..Designed to exploit the poor.

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« Reply #8 on: June 15, 2013, 03:13:19 pm »

@ Ozzy

don,t let get ahead of each other  on this, because once political views taking over the perception goes down the the drain
but first
I did not with one word mention that the US did good there all over the places, to the contrary if you read it again you may notice or that they are saints.
But stated that those countries (for example Dominican Repubic) are now better off then those countries which were friends of the other side of the political spectrum. That the US did a lot questionable things in that area and not only there,,no doubts. (already mentioned in my first post if you like to reread)
But then again fact is also that in the whole world, the moment something goes wrong the US is called upon for help,, or did you ever hear someone ask Russia or China or Iran or such  for help ?
Fact is, that millions (last year alone roughly 7 millions immigrants I read somewhere)would LOVE to live and imigrate to the US, to my knowledge that,s not the case for a lot other socalled global players.
suggest to leave it at that and not trying to count one against the other. In  the world history you find always countries who run the show and countries who are not. The one with the biggest stick is always depised by others but always welcome when the very same critics need the help of the big stick,,unfortunately.

If you like to discuss it further, feel free to send me a mail.
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Kelvin Davies
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« Reply #9 on: June 15, 2013, 03:47:44 pm »

Ozzy is right about track records.
I am old enough to remember the CIA having Allende killed and the reason why; he was getting in the way of a US corporation, ITT.
And it doesn't matter what people think of Chavez, he introduced a novel idea into Venezuela, democracy.
Having served as a soldier during the Cold War, I used to get all the propaganda stuff. The big hot button at that time was Viet Nam. "If we don't defeat the communists there, there will be a domino effect and all the South East Asian states will collapse, followed by Australia, New Zealand etc etc.
Guess what? The sky did not fall in!
I could go on forever but that would be political and this is not the forum for politics.
However, back to the economic model; if China has a bottomless pot of money, what is to stop them building the canal, then undercutting the Panama Canal on rates?
Once that happens and the Panama Canal begins to deteriorate, as no trade means no maintenance, the Chinese could then hike the rates and get their money back.
Don't underestimate them.
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« Reply #10 on: June 15, 2013, 03:54:34 pm »

I was just watching Oliver Stones Untold History of the USA.
Roosevelt comes out as a Good Guy and his vice President Wallace.

Truman Not so much...
The point I would make after watching this..Was Let us aLL go down the road of Friendly competition.. and NOT the Cold War model of proxy wars..
We are ALL losers that way...
I grew up in a Country that benefited under the American umbrella.

Lets do something NEW with China..
A competition based on brains, hard work and peaceful competition.
"WE have nothing to fear...but Fear itselF"  so said FDR.
Probably USA's greatest presidents.
Let us not be afraid of China..Let us compete against them.
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« Reply #11 on: June 16, 2013, 02:09:02 pm »

Hi all,

I’m just reading this topic about the ‘Great Nicaragua-Canal Project’ and have to say, it’s all worth it to read the posts over here. About political issues and statements mentioned over here; to all posts can something to be said and even I have my own point of view about US and China. But I won’t share it here, because as mentioned before this is not the topic about politics.

I read the total costs of digging the new canal might reach up to 40 billion US$.

Quote from the article on http://world.time.com :’ the Nicaraguan government of President Daniel Ortega muscled into law a sensational 50-year concession that grants a little-known private Chinese company the authority to “design, develop, engineer, finance, construct, possess, operate, maintain and administer” the Great Nicaragua Canal megaproject. Estimated to cost $40 billion, it includes an interoceanic canal, an oil pipeline, an interoceanic “dry canal” freight railroad, two deepwater ports, two international airports and a series of free-trade zones along the canal route’.

It seems it’s not only the canal as the scope of work, there’s more. Like 2 airports, oil pipeline, ports etc. That makes it even more interesting, because it means the investment for only the canal will be less than 40 billion US$. Meaning to say, the starting point for the Great Nicaragua-Canal’ to compete with the with the Panama Canal is totally different as suggested in the posts before.

Keep this in mind, because there’s more...

For me it’s hard to believe that a ‘little-known private Chinese company’ will carry out a project of a size like this. Even if this company will only get the role as ‘main contractor’, no doubt the Chinese government is involved as well!

It’s not mentioned who will finance the project, but as said in the posts before, the money will come from Chinese investors. Other possibilities are hard to imagine.
But if Chinese investors (or the Chinese Government) will finance the project, it does not mean it will cost them the whole amount as mentioned in the article.

Why? Simple…
Government owned Chinese companies and contractors are involved in the project, so the profits made on this project, will go back to China.
Taxes paid by the Chinese employees on their salary (assume they pay taxes), will turn back to the Chinese Government.
Equipment used to carry out the project, well, I bet, are ‘made in China’: Digging cranes, dredgers, cargo ships, bulldozers, you name it all, it’ll be made in China…
So a huge part of the investments will turn directly back to China: employees, companies, contractors and finally the Chinese Government.

For you and me, the amount of costs for the project will be US$ 40 billion, but not for China… It will be a huge impulse for the Chinese economy and export.

Furthermore they ‘own and operate’ the canal, airports, ports etc etc for the next 50 years. And what will happen afterwards? Make your own conclusion…

I think it’s an excellent piece of doing business for the Chinese…

Keep up the good work!
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