3 September 1998
Canal proposed to revive Nicaraguan waterway

                  MANAGUA, Sept 3 (Reuters) - Nicaraguan legislators on Thursday proposed
                  creating a $50 million commercial waterway linking Nicaragua's Pacific region
                  to the Caribbean, reviving a trade route that dates to the 16th Century.

                  The proposal, introduced as a bill to the National Assembly, would grant
                  EcoCanal S.A. the rights to the project, beginning with a feasibility study, in
                  the hopes of starting construction in 2000, EcoCanal officials said.

                  "The idea is to rehabilitate an old commercial waterway for the 21st Century
                  and the globalized market," Tim Coone, EcoCanal's technical director, told

                  EcoCanal is a private firm that incorporated last year to promote the canal,
                  which is meant to aid the transportation of goods within Nicaragua and is not
                  seen as a competitor to the Panama Canal.

                  Nicaragua's Pacific Coast is cut off from the Caribbean Sea by a large
                  mountain range and jungle terrain. There is no highway connecting the two
                  coasts. But Lake Nicaragua, the largest freshwater lake in Central America,
                  dumps into the San Juan River, which crosses the isthmus and reaches the

                  Spanish colonists once sailed the route in the 1500s, making it an important
                  trade avenue to move commerce between Spain's American colonies and the
                  mother country.

                  But geological changes over the years have rendered the San Juan difficult to
                  navigate. The plan introduced on Thursday would require dredging part of the
                  river, a biologically diverse and relatively undisturbed ecosystem sometimes
                  called the Amazon of Central America.

                  The 200-mile (325-km) waterway would run from Granada on the
                  northwestern edge of Lake Nicaragua to San Juan del Norte at the mouth of
                  the San Juan River on the Caribbean Coast.

                  It would accommodate boats carrying up to 200 metric tons of cargo and
                  could cut in half the cost of transporting goods within Nicaragua, Coone said.

                  Copyright 1998 Reuters Limited.