In a previous post (click here) I listed four factors as to why the likelihood of a canal through Nicaragua is becoming less of a possibility. However, today’s Canal Update is not even about Nicaragua.  It is about Costa Rica.  No, you haven’t been asleep.  There is no canal in Costa Rica–yet, but yesterday, May 22nd, the Interior Minister of Costa Rica announced on TV, that the Government is indeed serious about going forward with plans to build a 320 kilometer inter-ocean “dry” canal across Costa Rica. It will be a rail link connecting a port on the Pacific Coast, to a port, most likely Puerto Limon, on the Caribbean (Atlantic) coast. click here for map.

Feasibility studies are currently in progress by two separate companies.  If the studies show that it is a viable project, the dry canal project has a very good chance of soon becoming a reality.  Should that happen, it will pose an additional problem for the Nicaragua Canal, which is already behind schedule, and facing serious challenges.

The major elements of a dry canal include container loading and unloading facilities at ports located on either side of the country, and a high speed railroad right-of way between the two ports. The ability to load and unload upwards of 18,000 containers a day is a design requirement, and it is expected that trains, each carrying about 440 containers would leave for the opposite coast about every 40 minutes.  Unlike the project in Nicaragua, only a relatively few people will be required to relocate, because some of the necessary railroad right-of-way already exists, and building a railroad  is far less intrusive than creating a giant waterway. Nevertheless, the dry canal will require a wider, and more stable roadbed than currently exists in Costa Rica, as well as new heavy-duty railroad track.  Oh, and they will also need some trains.

The idea for the dry canal actually goes back many years, and people both inside and outside of the government are asking why the building of a dry canal has taken so long to approve.  However, the announcement of the proposed Nicaragua Canal, and the opening next month of the expanded Panama Canal has rekindled interest in the notion that, it just might make economic sense for Costa Rica to have a canal of its own, and two companies have submitted proposals to build it.

While it will take time and money to create the elements needed for a functioning dry canal, the cost will be far less than digging a waterway, and the time to create it will be a fraction of what it would take to create a canal of the type that now exists in Panama. Granted, Costa Rica is not known for building roads in a rapid manner, but undertaking a project like the dry canal in conjunction with private enterprise, would likely be a different story.

What remains to be seen is just how efficient the expanded Panama Canal will be. There is an expectation that, in addition to allowing larger ships to make the transit, the overall efficiency of the canal will also be increased. If that should lead to a lowering of the existing transit fees, it could impact the viability of building a canal elsewhere. The practicality of any new canal, wet or dry, is dependent on many variables, including the current slowdown in international shipping. That may only be temporary, so the need for a dry canal, especially to service smaller cargo ships, might just make sense. Time will tell, but for now, it looks as if Costa Rica is serious about accepting the challenge of building an inter-ocean, rail based, dry canal. They are however, not alone.  Even as I write this, five or six other dry canal projects are also being considered, and did you know that Panama has a dry canal as well.  My-my-my, it is indeed a very interesting situation that exists these days.

As always, I’ll keep you posted.

—Jim