Intermodal bridge duplicating Panama Canal took shape in Mexico. Will it matter?

Every time the Panama Canal experiences shortages of water and limits number of daily crossings, discussions on constructing an alternative "bridge" come back in force. Yet the dream of a reliable alternative Gulf-Pacific link has long challenged the engineers and investors alike.

A couple of over-the-top projects emerged as more viable than others, but nothing much became of them.

One of them involved digging in Nicaragua. The plan announced with great fanfare in January 2014 envisioned building waterworks over the distance of 173 miles (278 kilometres) starting in December of 2014 and concluding sometime in 2019. Upon approval of the project by the National Assembly, a 50-year operating concession was promptly granted to Hong Kong Nicaragua Canal Development. Before the shovels hit the ground, the investment vehicle went bankrupt and no suitable suitor willing to drop about US$20 billion on such venture has emerged since.

The second, no less ambitious project emerged in 2016 in Costa Rica. Unlike the Nicaragua Canal, the Costa Rica Canal is really a 195 miles (315 kilometres), ten-lane highway and a three track railway. This road-rail land bridge would link two new ports, one in Santa Elena Bay in La Cruz and another in Parismina in Limon. In the proposal, both ports would be able to accept post-panamax vessels. The project died quietly or so it seemed. In August 2023, the local press suggested that Saudi Arabia was interested in bankrolling the estimated US$10-US$15 billion project.

While Panama’s neighbours kept discussing and re-discussing the transcontinental connection, farther north Mexico got on with their own project. It is also a dry canal linking two ports and covering distance of 188 miles (303 kilometres). The Interoceanic Corridor of the Isthmus of Tehuantepec, abbreviated as CIIT, is currently underway, but its most important element, the Tehuantepec Railway has been upgraded to carry freight and passenger traffic. The speed of the freight trains is pegged at 43 mph (about 70 km/h), a far cry from the typical 62-74 mph (100-120 km/h), but no matter. It is a low emissions connection available now.

The focus now is on creating more attractive ports at both ends of the line. They both have certain infrastructure to exchange merchandise by rail, but urgently need renovation and expansion.

On the Gulf side, it is the port of Coatzacoalcos. A shallow channel of 31-35 ft (9.4 - 10 m) connects to even shallower pier 21-25 ft. (6.4 - 7.6 m).? Currently, port's volumes come from petroleum and derivatives, chemical products, fluids, agricultural and mineral bulk, general cargo, and oversized and heavy cargo for the petroleum industry. Containerized cargo represents a tiny fraction of freight moving through the port. There is good intermodal connection going north west toward Veracruz and other major industrial centers in central Mexico. Actually, the ongoing expansion of container handling capacity in Veracruz is worth its own story, but not in this article.

On the Pacific side is the port of Salina Cruz. Here, the draft situation is more challenging. The channel is only 11-15 ft (3.4-4.6 m) deep precluding any large container ships calling the port. The port infrastructure is in worse shape than that at Coatzacoalcos. In August 2022, the Salina Cruz Port Authority launched a tender to carry out the preliminary design for the container terminal, but the actual BOT contract has yet to be signed. Needless to say, for any large ships to call, a serious dredging will be required in both ports.

So, what is the value of CIIT? In the short term, limited by port infrastructure at both ends and low capacity of the freight rail, this land bridge has more value for economic development of the Veracruz and Oaxaca regions than for international trade currently utilizing Panama Canal. In the long run, it will create a viable alternative to the land bridge paralleling Panama Canal.

One thing is certain. The global trade needs an efficient Pacific-Atlantic link. The Panama Canal will remain the most viable option for that, but the unpredictable global climate change may make some alternatives to Panama Canal more viable than others.

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