Colombia Canal, aka Railroad

[from Merco Press, 14 February 2011]

Rail alternative to the Panama Canal proposed by China to Colombia

A rail alternative to the Panama Canal built by China is being considered by Colombia in a move that would boost trade between Asia and South America. The 220 kilometers 'dry canal' would link Colombia’s Atlantic and Pacific coasts by rail, according to Juan Manuel Santos, the president of Colombia.

“It's a real proposal... and it is quite advanced,” he told The Financial Times. “I don't want to create exaggerated expectations, but it makes a lot of sense.”

”The studies (the Chinese) have made on the costs of transporting per ton, the cost of investment, they all work out“ added President Santos.

The rail link would run from the Pacific to a new city near Cartagena in northern Colombia, where imported Chinese goods would be assembled for re-export throughout the Americas, the Financial Times report in Sunday's edition said.

The project is one of several Chinese proposals designed to help boost transport links between the two continents.

It is also hoped the rail link would help encourage the US to ratify a four-year-old free-trade agreement. Agreements with Colombia and Panama, which would eliminate most tariffs for both countries, have stalled since they were signed in 2006 and 2007.

The Panama Canal represents roughly 5% of world trade, with 13,000 to 14,000 ships passing through it every year.

Sino-Colombian trade stood at more than 5 billion US dollars in 2010, making China Colombia's biggest trade partner, after the US.

”Colombia has a very important strategic position, and we view the country as a port to the rest of Latin America,” Gao Zhengyue, China's ambassador to Colombia, told the Financial Times.

The report also said talks are most advanced over a 800 kilometers railway and expansion of the port of Buenaventura. The 2.7 billion US dollars project is funded by the Chinese Development Bank and operated by China Railway Group.

According to a report posted on the website of the China Coal Transport and Marketing Association last October the project would link the Pacific to the Atlantic and be used to transport coal. Colombia has South America’s largest coal reserves and is one of the world’s leading exporters.