UAE mulls new 'Panama Canal'

The UAE is considering an investment in building a canal across Nicaragua to compete with the Panama Canal, Sheikh Abdullah bin Zayed, the Minister of Foreign Affairs, said during a visit to the Central American country. Despite expansion work under way on the Panama Canal, which opened in 1914, Nicaragua believes a second route between the Atlantic and Pacific oceans is required to cater for the expected growth in global sea trade.

"We are looking for various means of co-operation - of being part of the initiative to unite two oceans with a canal," Sheikh Abdullah said, after a meeting with the Nicaraguan president, Daniel Ortega, on Monday. Mr Ortega made a detailed presentation to the delegation from the Emirates regarding the potential for jointly developing the country's energy, ports and infrastructure, including the canal.

Other countries that have reportedly expressed interest include Venezuela and China. Sheikh Abdullah told reporters that "if the studies are positive, we will be able find many partners" to move it forward. "I am here with a team that has been well chosen and who represent the Government and the private sector, many of them from very important firms," Sheikh Abdullah said. "I think they are going to be very interested in reviewing this proposal [for the canal]," he added.

Sheikh Abdullah did not say which Abu Dhabi companies were part of the delegation. The UAE already has several Government and private sector companies involved in shipping. DP World, owned by the Dubai Government, is already one of the largest port operators and Jebel Ali is one of the world's busiest ports, boasting the largest man-made harbour ever built. Abu Dhabi's biggest companies in the sector include Emirates Ship Investment Company (Eships) and Abu Dhabi Ports Company, which is building the Khalifa Port and Industrial Zone in Taweelah.

The Panama Canal is undergoing a US$5.25bn (Dh19.1bn) expansion, including a third lane to accommodate larger ships. Nicaragua is still studying the cost of the proposed new waterway, which Mr Ortega said would fill a niche regardless of the Panama Canal. "Even with the expansion of the Panama Canal, it is not going to be enough to accommodate commercial traffic demands," Mr Ortega said in a speech posted on the presidential website.

Recently, his government revived the canal idea to promote development in Nicaragua, which is the second-poorest in the western hemisphere behind Haiti. [e-mail] * with agencies