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Wire & Cable ASIA – May/June 2011
35
From the
americas
Trade
Facilitated by China, a rival to the Panama
Canal may link the Atlantic and Pacific by
rail across Colombia
China is in talks with Colombia to build an alternative to
the Panama Canal that would connect the South American
country’s coasts by rail. As noted by the
Financial Times
(13
th
February), a secondary effect of the “dry canal” initiative
would be to spur Washington to push for Congressional
approval of a stalled US-Colombia free-trade accord. If
there is no movement on the pact this year the Colombians
will likely seek other partners, so pressure for ratification is
building in the United States.
In an 11
th
February interview in Bogotá, President Juan
Manuel Santos of Colombia told the FT’s John Paul Rathbone
and Naomi Mapstone that the proposal for the 137-mile rail
link is “quite advanced” and that the feasibility studies made
by the Chinese “all work out.” The line would run from the
Pacific to a new city near Cartagena where imported Chinese
goods are to be assembled for re-export throughout the
Americas. Colombia-sourced raw materials would make the
return journey to China.
“I don’t want to create exaggerated expectations, but it
makes a lot of sense,” Mr Santos told the reporters. “Asia is
the new motor of the world economy.”
Chinese and Colombian officials say talks are most advanced
over an existing railway and expansion of the Pacific port of
Buenaventura. That $7.6bn project, funded by the Chinese
Development Bank and operated by China Railway Group,
would move up to 40 million metric tons of cargo a year from
Colombia’s economic heartland to the Pacific. Priority would
be given to coal intended for China.
Colombia is the world’s fifth-largest producer of coal, but
most of it is exported via Atlantic ports even as demand is
growing fastest across the Pacific.
The FT reporters observed that the mooted rail link is the
latest example of China’s increasingly pro-active lending
to the developing world, as evidenced by Chinese banks
having lent more to developing countries over the past two
years than the World Bank. From documents seen by the
FT, the project appears to be just one of a series of Chinese
proposals that would boost transport links with Asia and
improve Colombia’s creaking infrastructure – a priority of
Mr Santos’s administration.
❖
Although Panama also has an 50-mile railway connecting
both sides of the isthmus, currently the canal’s main
competition is the rail link from California to the US
eastern seaboard – fast, but expensive. A question worth
considering is whether the proposed rail line would be a
more attractive expedient than the canal, which is only a
third as long and undergoing a $5.25 billion expansion to
double its capacity.
Even if it not cheaper or faster, the proposed rail link
would be a striking example of China’s incursion into
what the US once considered its backyard.
Statue of Liberty Image from BigStockPhoto.com
Photographer: Marty