Chinese firm to develop US$20bn Panama Canal alternative in Honduras

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Friday, June 21, 2013

The Honduran government plans to sign a memorandum of understanding with China Harbour Engineering Company (CHEC) on July 8 for construction of an interoceanic railway line that will link the Pacific coast island of Amapala with the Atlantic coast port Castilla, according to a release from the presidency.

The US$20bn project entails construction of two ports, 10 railway lines running 600km between the two coasts, a 2.4km bridge to link Amapala to the mainland, a refinery in Castilla port and an oil pipeline.

Honduras has chosen CHEC to carry out the project following a series of proposals from other, unnamed companies, according to the release.

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CHEC will carry out the technical and financial studies for the project and the feasibility studies are expected to kick off in two months and take a year to complete, local papers have reported.

This is the third interoceanic infrastructure project to be announced in Central America over the past few weeks.

On June 13, Nicaragua's congress approved a US$40bn concession that gives Hong Kong-based HK Nicaragua Canal Development Investment and its local arm HKND the right to develop and operate an canal crossing the country coast to coast and other infrastructure included in the project under a completely tax-free regime.

At US$10bn, Guatemala's cross-country project is the smallest. President Otto Pérez recently voiced his support for the project that includes a 390km dry canal with gas and oil pipelines, a high-speed highway and a train line.