The Impact of China and Colombia’s Two Ocean Railway to the Panama Canal

2011-03-09

The president of Colombia, Mr. Juan Manuel Santos, in an interview with the U.K. Financial Times on February 13, 2011, for the first time publicly expressed that Colombia will be constructing, in cooperation with China, a dry canal (land canal) connecting the coast of the Pacific Ocean and the coast of the Atlantic Ocean, a two ocean railroad construction project that is 220 km in total length with a total budget of 7.6 billion U. S. dollars. The Administrator of Autoridad del Canal de Panama, Mr. Alberto Alemán Zubieta, pointed out that the possibility that the Colombia’s dry canal project has any impact on the Panama Canal is low. Currently, the most important country to benefit from the Panama Canal is the United States, followed by China and Chile. A number of experts analyze that the expansion of the Canal will bring positive results to the port of Miami, and that countries such as Ecuador, Peru, Japan, South Korea and Taiwan will also benefit. From an economic standpoint, perhaps the two-ocean railroad will impose a challenge to the Panama Canal, but many experts believe the economic benefit of replacing the Panama Canal is not obvious. Meanwhile, there is double pressure from the expansion of the Panama Canal and the transport of the original two-ocean railroad.