Tuesday, February 15, 2011

China plans Colombian rail link to challenge Panama canal

Chinese plans for a rail link in Colombia could compete with the Panama canal
which transformed global trade when it was opened in 1914

From TheGuardian

It is a dream that bewitched Spain, ruined Scotland, stumped France and empowered the US: a path from the Atlantic to the Pacific oceans.

The ambition unleashed ruinous follies in Panama's jungles until the US finally finished a canal in 1914, an engineering feat that transformed global trade.

Now, almost a century later, China is envisaging a new link between the seas: a rail link through Colombia – a potential rival to the canal that would crown China's economic push into Latin America.

Beijing on Monday confirmed an announcement by the Colombian president, Juan Manuel Santos, that both governments are considering a rail connection from Cartagena, in the Caribbean, to the country's Pacific coast 280 miles (450km) away.

The president's office refused to say which Pacific site was being considered.

The railway would facilitate the export of raw materials such as coal, as well as opening the way for Chinese imports.
"It's a real proposal ... and it is quite advanced," Santos told the Financial Times.
"The studies [the Chinese] have made on the costs of transporting per tonne, the cost of investment, they all work out."

map (1927)
Few doubt China can carve a path through the northern tip of south America.
It has, after all, carved a 550km railway to Tibet, rebuilt Angola's railways and is busy erecting a
giant industrial port in Brazil.
The question is whether the railway would be cheaper or faster than the Panama canal, which is only a third as long and undergoing a $5.25bn (£3.3bn) expansion to double its capacity.

Panama also has an 80km railway connecting both sides of the isthmus, but until now the canal's main competition has been the rail link from California to the US eastern seaboard, which is faster but more expensive.

Could Colombia's railway compete?
President Santos seemed to have little doubt, stressing the "incredible" number of Chinese delegations pitching proposals.
The railway would require a production and assembly hub in a new city south of Cartagena, he said.
"I don't want to create exaggerated expectations, but it makes a lot of sense. Asia is the new motor of the world economy."

With Chinese financing, the project would be a viable and attractive way for Bogota to ease transport bottlenecks in its mining industry, said Heather Berkman, a Eurasia Group analyst. "Colombia is no position to refuse offers of investment in its infrastructure. They need financing from outside sources and this makes sense for them."
Bogota also hopes the plan will focus Washington's mind on ratifying a stalled free trade accord.
"The Colombians have made it clear if there's no movement on the FTA this year they will court other parties. So there is pressure on the US."

The railway would hardly have the same impact of the canal a century ago but would be a symbol of China's economic incursions into what the US once considered its backyard.
Latin American exports to China leapt to $41.3bn between 2000 and 2009. China is Colombia's second largest trade partner after the US, with bilateral trade rising from $10m in 1980 to more than $5bn in 2010.

However, the railway project could yet join a list of venerable pipedreams.
In 1534 King Charles V of Spain ordered a survey for a route through Panama, hoping for a strategic edge over the Portuguese.

In 1698 a Scottish flotilla landed in Darien, a remote wedge of rainforest straddling what is now Panama and Colombia, hoping to found a colony and a gateway to the new world.
The venture collapsed and bankrupted Scotland, hastening its loss of independence to England.
"If the Scots had been successful the canal might have been constructed in Darien, by Panamanians speaking English in a lowland Scots dialect!" rued Jim Malcolm, a Scot and former British ambassador to Panama, in a 2005 booklet.

A French effort in the 1880s under Ferdinand de Lesseps, who built the Suez canal, foundered because of poor planning and disease which killed about 22,000 workers.

1939 "Historical Map of the Canal Zone and Vicinity showing various routes, settlements between 1502 and 1855

The US revived the canal project in 1903 after encouraging Panama, then part of Colombia, to secede and hand control of the waterway to Washington.

In 2006 Nicaragua revived its own long-held dream of a rival canal but the idea quickly faded.
It did not have Chinese backing.
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