Chinese rail link to challenge Panama Canal

Published: Thu, 2015-04-09 12:59

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Colombia's second largest trade partner

China is offering to build a rail link to rival the almost century-old Panama Canal, said the Colombian president Santos recently.

The 220km rail connection would connect Cartagena, on the northern Atlantic coast of Colombia, with its Pacific coast – making it easier for China to export its goods through the Americas and import raw materials such as coal.

"It's a real proposal … and it is quite advanced," Juan Manuel Santos told the Financial Times.

Although the link would be almost three times the length of the canal that cuts through neighboring Panama, the president added:

- The Chinese studies have made on the costs of transporting per ton, the cost of investment, they all work out, said the president.

The success of the planned connection would depend on costs as well as speed. Sceptics point out the canal is undergoing a $5.25bn (£3.3bn) expansion to double its capacity.

China is Colombia's second largest trade partner after the US, with bilateral trade rising from $10m in 1980 to more than $5bn in 2010.

But the FT suggested Bogotá also hoped the rail proposals would encourage Washington to push for ratification of a free-trade agreement signed by both governments four years ago, but yet to be approved by Congress.

Source: Financial Times