A New Trade Route

“DRY CANALS” TO TURN CENTRAL AMERICA INTO A GLOBAL TRADE HUB

Cargo Train

The future of Central America’s economy is in trade, whether it be transoceanic or transcontinental.
It is a vision shared by every country of the region, a vision that has inspired them to embark on a series of ambitious projects to build a network of what has come to be known as “canales secos” (dry canals in Spanish) or corridors reserved for the transport of cargo, whether it be in the form of a road or a railway.

From Mexico to Panama, these corridors will link the Atlantic and Pacific coasts as well as the northern and southern continents of the Americas.
By binding themselves together with this network of roads and railways, Central America’s countries will be closer to achieving their ultimate goal of becoming a single trade block.

The “Mesoamérica” Project

This vision was brought into clearer focus in 2008 at a conference in Tuxtla, Mexico, where the heads of government of Guatemala, Honduras and Nicaragua of Central America as well as of Mexico and the Dominican Republic of the Caribbean became the first signatories of “Proyecto Mesoamérica” or Project Mesoamérica. The project foresees - among many other initiatives aimed at promoting greater regional integration - the construction of an international road network across the region, stretching 13,132 kilometres from Mexico in the north of Central America to Colombia in the south. It entails more than 100 construction sites for a total investment of at least $8 billion.
The biggest job has been the Pacific Corridor, which is 62% complete. Financing has come mostly from the Inter-American Development Bank and other entities like the Central American Bank for Economic Integration and the Development Bank of Latin America. The government in every country through which the corridor passes has been responsible for their section of it, holding international tenders in the form of public-private partnerships.

The Pacific Corridor

Among the various so-called dry canals envisioned by the region, the most important one is the Pacific Corridor because it is seen eventually to facilitate the transit of 80% of the merchandise across Central America from north to south, and vice versa. At a cost of $1.8 billion, its 3,210 kilometres of highway will run through Mexico, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. With construction sites still open in all of the countries involved, the date of completion has yet to be determined even if initial projections had set it for 2018. Some 62% of the work has been done. Work recently began in Honduras for the stretch from Galan to Tegucigalpa with some 4,500 jobs to be created. Once the corridor is finished, the waiting times for trucks loaded with merchandise at the borders are expected to drop from the usual 10 hours to half that long. And travel across Central America should be able to be done in 140 hours at an average speed of more than 60 kilometres per hour, 50 hours less than the current 190, according to the corridor’s builders.

 
Panama Canal Railway
 

Costa Rica’s Dry Canal

The country’s transport ministry plans to put up for tender in the coming weeks the contract to build this corridor at a cost of more than $4 billion. Work has already begun on expanding the ports of Limòn on the Atlantic and Punta Descartes on the Pacific. The canal, which will run between the two ports, will have a high-speed train able to move 440 containers a day with departures every 40 minutes. A highway will run parallel to the railway. Another $16 billion is expected to be invested to create a series of industrial districts and facilities for the transport of grains and other foodstuffs.

The Atlantic Corridor

This one is to start at Veracruz, Mexico, and end at Bocas del Toro in Panama. Some 695 of its 2,906 kilometres have already been built. In addition to the development of tourism and other facilities along the Atlantic coast, the corridor will also see the expansion of power grids and telecommunications networks as well as the improvement of basic services for the local population. The country that stands to benefit the most is Honduras.

A Dry Canal in Panama

Even Panama seems ready to have its own corridor despite having recently opened another waterway to benefit trade. The project is still under study but the idea would be to build a road from Puerto Armuelles on the Pacific to Bocas del Toro on the Atlantic. The government is assessing the amount of cargo that could travel along this corridor, which would also have a railway running parallel to the oil pipeline of Petroterminal of Panama.

Other Interoceanic Corridors

Honduras, Nicaragua, El Salvador and Guatemala are preparing for their own interoceanic corridor. Nicaragua has approved the construction of one some 290-kilometres long to Honduras. Meanwhile, Guatemala has plans for a corridor running 372 kilometres from Puerto Barrios on the Atlantic to Puerto de Acajutla in El Salvador on the Pacific. Bidding for contracts is expected to start in the coming months. A corridor between Honduras and El Salvador is 80% complete. Set to run 391.8 kilometres between Puetro Cortés on the Atlantic coast of Honduras to La Union in El Salvador on the Pacific, it is scheduled to be finished in the early 2017. The investment will total nearly $300 million.

“PROYECTO MESOAMÉRICA” WAS LAUNCHED IN 2008 WITH THE AIM OF BUILDING A TRANSPORT NETWORK ACROSS CENTRAL AMERICA TO FACILITATE TRADE

A CORRIDOR ALONG THE PACIFIC COAST IS THE MOST IMPORTANT INITIATIVE, LINKING THE PORTS OF THE REGION FOR 3,210 KILOMETRES

WHEN THE CORRIDOR ALONG THE PACIFIC COAST IS COMPLETE, LAND TRAVEL ACROSS CENTRAL AMERICA WILL TAKE 140 RATHER 190 HOURS

EVEN HONDURAS, NICARAGUA, COSTA RICA, EL SALVADOR AND GUATEMALA ARE WORKING ON THEIR OWN CORRIDORS. THERE IS EVEN ONE FOR PANAMA.