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Colombia: Can a land route rival the Panama Canal?

China and Colombia are talking about building 250 miles of railroad to link Colombia's Atlantic and Pacific coasts.

Colombia is also eager to secure Chinese financing to build new highways, railroads and ports. Colombia’s rundown transportation network raises the price of doing business here making the country less competitive. China, for example, has expressed interest in upgrading shipping facilities at Buenaventura, Colombia’s only Pacific port.

“There are Chinese companies and banks that want to carry out these projects,” said Alvaro Ballesteros, executive director of the Colombian-Chinese Chamber of Commerce.

Some analysts puzzle over the timing of the “dry canal” announcement. The Panama Canal is currently undergoing a $5 billion expansion that will ease congestion, a key Chinese concern as the country’s exports have boomed.

Watson, however, says a railroad across Colombia would allow China to hedge its bets with an alternative to the canal while sending a sharp message to the Panamanian government — one of the few that still recognizes Taiwan rather than Beijing.

Despite President Santos' upbeat words, the project remains very much on the drawing board. The Chinese Development Bank has expressed interest in helping to fund the railroad and other projects in Colombia, which would cost about $7.6 billion. Yet no one has carried out feasibility studies.

“The real question is whether a business case can be made for it,” Cardenas says. “Would the Colombian railroad be profitable?”

The tracks would have to be laid across the imposing Darien jungle near the Panamanian border, an area teeming with guerrillas and drug traffickers who could sabotage the project. In fact, environmental and security concerns have long discouraged Panama and Colombia from building a cross-border jungle highway to span the so-called “Darien Gap.”

Still, Panama was part of Colombia before breaking away under U.S. pressure in 1903, a year before construction began on the canal. Ever since, Colombia has longed for its own transoceanic route. Thanks to China, Colombia may have finally found a partner with the financial muscle to make it happen.

http://www.globalpost.com/dispatch/china/110221/panama-canal-trade-china