Sources tell Haaretz that the recent Nicaragua-Costa Rica border incident was a trial balloon by the creators of a plan to build a new canal in Latin America.
By Shlomo Papirblat

The recent border dispute between Costa Rica and Nicaragua is a sign of an ambitious plan by Venezuela, Iran and Nicaragua to create a "Nicaragua Canal" linking the Atlantic and Pacific oceans that would rival the existing Panama Canal.

Costa Rica says that last week Nicaraguan troops entered its territory along the San Juan River – the border between the two nations. Nicaragua had been conducting channel deepening work on the river when the incident occurred.

Sources in Latin America have told Haaretz that the border incident and the military pressure on Costa Rica, a country without an army, are the first step in a plan formulated by Venezuelan President Hugo Chavez and Nicaraguan President Daniel Ortega, with funding and assistance from Iran, to create a substitute for the strategically and economically important Panama Canal.

The plan has aroused concern in Washington, and the U.S. has started behind the scenes efforts to foil it.

Panama is a country with a distinctly pro-American orientation. Since its construction was completed in 1914, the Panama Canal has served as an irreplaceable link between the Atlantic and Pacific oceans. More than 14,000 ships pass through the canal annually and recently the one millionth ship passed the canal since its opening.

In recent years, the amount goods passing through the canal in each direction totaled about 190 million tons. The transit fees paid by the ships and other canal-related activities account for 75 percent of the annual revenues of Panama's economy. The Panamanian economy and Panamanian stability would be in real danger of collapse if another canal took away its monopoly on shipping between the Atlantic and Pacific oceans.

In recent years, the government of Ortega, a former Sandinista underground member, has tried to gain control of the San Juan River, which lies on the Nicaragua-Costa Rica border. Costa Rica brought the issue before the international court in The Hague, which after careful examination of historic maps, past agreements and terrain features, determined in July 2009 that the river belonged to Nicaragua, and that the border is located on the southern bank of the river. The court also ruled that Costa Rica had the right of free passage on the river.

However, the results of this ruling are not enough to allow for the implementation of the plan formulated by Venezuela and Nicaragua. In order to build a new canal linking the two oceans, they would also need to control the southern bank of the river and the point where the river meets the Atlantic Ocean.

Several weeks ago, Nicaraguan foreign ministry official informed Costa Rica of Nicaragua's plans to do work to deepen the channel of the San Juan River in order to improve shipping on the waterway. Costa Rica did not oppose the plans, on the condition that the work did not harm the river or the bank on the Costa Rican side of the river.

The apparent engineering project was surprisingly placed under the supervision of Eden Pastora, better known as "Commandante Cero", a hero of the former Sandinista underground. This was a hint that the work had more than a simple engineering purpose.

Two weeks ago, Pastora went to a farm of a Costa Rican citizen in the Calero Island area and told the farm owner that the area belonged to Nicaragua. The farm owner objected and subsequently farm workers were allegedly beaten and farm animals were allegedly killed. The farm owner called Costa Rican police who arrived and reported to their commanders that Nicaraguan troops had entered Costa Rican territory and raised a Nicaraguan flag.

Costa Rican President Laura Chinchilla last week called for a special session of the Organization of American States, located in Washington, but, after a day of talks, no resolution was reached. During the talks, Venezuela supported Nicaragua's position while Panama strongly opposed it.

Chincilla announced on Wednesday that she plans to raise the issue before the United Nations Security Council and again demanded that Nicaraguan soldiers withdraw from Costa Rican territory.

Sources in Latin America consider these events, and the power demonstrated by Nicaragua, as a trial balloon by the creators of the "New Canal Plan" – Venezuela, Iran and Nicaragua. Western intelligence agencies are closely following the path of heavy machinery equipment to Nicaragua as well as the activities of Iranians in the Nicaraguan capital Managua.

A U.S. State Department official told Haaretz's Washington correspondent Natasha Mozgovaya on Wednesday that the U.S. is not aware of any plans to build a new canal in Latin America.

In 2007, Chavez announced a plan to build a $350 million road connecting the two oceans and the Iranians have expressed an interest in constructing a port on the Atlantic Ocean. The U.S. did not express concern about either of those initiatives.


http://www.haaretz.com/news/international/iran-venezuela-plan-to-build-rival-to-panama-canal-1.324173

Why?

The widening of the Panama Canal is well on it's way and are due to be done by 2015. Another canal through Nicaragua makes no sense as it will be longer and slower.

China would like to get a competitor going. Techniques for making canals have progressed - the costs may not be that great.
S.

They need to start right away.
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ABC, are you not worried about the environmental and social impact of the new canal? I am surprised you would not want this studied in order to mitigate any adverse impacts on the environment and the communities .

Panama Canal Project Called ‘Disaster' in U.S. Cable

Dec. 18 (Bloomberg) -- Panamanian Vice President Juan Carlos Varela called the Panama Canal expansion a “disaster” after a group led by Spain's Sacyr Vallehermoso SA won a $3.1 billion contract to accommodate larger ships, a confidential U.S. diplomatic cable said.

The cable, released by WikiLeaks and published today in Madrid's El Pais newspaper, said that Varela expressed concerns that Sacyr is in “deep financial trouble” and may not be able to complete the work.

“The Canal expansion project is a disaster,” the cable cited Varela as saying at a lunch with U.S. Ambassador Barbara Stephenson on Dec. 29, 2009. “In two to three years, it will be obvious this is all a failure.”

The ambassador's office had “provided relentless advocacy” for Bechtel Group Inc., the largest U.S. engineering company, in its failed bid to win the largest contract for the $5.25 billion canal expansion, according to the cable.
Sacyr is working with Italy's Impregilo SpA to build a third set of locks that will allow bigger ships to traverse the canal by 2014. The contract was awarded in July 2009.
The El Pais article had no response from Sacyr on the cables. In August, the company called the canal bidding process “exemplary,” according to today's El Pais story. Calls and e- mails by Bloomberg News seeking comment from Sacyr and Varela's offices outside of business hours weren't returned.

The Panama Canal Authority, in an e-mailed response to the article, said as the waterway's operator it “shields” itself from any outside pressure.

Expansion of the 80-kilometer (50-mile) canal, which connects the Pacific and Atlantic oceans, remains on schedule after heavy rains caused the waterway's first closure in more than 20 years, Alberto Aleman, the canal's chief executive officer, said in an interview on Dec. 13.

--Editors: Sylvia Wier, Joe Sabo
http://news.businessweek.com/article.asp?documentKey=1376-LDN4MA07SXKX01-7RA3NTCDMFSVVFVL575BT5D8A7

i guess if betchel hadn't been "tied up" in iraq and afghanistan doing their "humanitarian duty to the world" they could have bid a bit lower and gotten the contract. maybe this is why cheney was trying to get dismissed early, he missed out on some sweet negotiating deal here maybe chavez could hire them to build their canal??

It is shorter from China to Brazil through the new canal.
http://www.youtube.com/watch?v=rKc6UMfZW6U&feature=related



S.