A country in Central America has ambitious plans for a £15.7bn infrastructure mega-project that would rival the iconic Panama Canal. 

Honduras is keen to create a ‘dry canal’ that will connect the Pacific and Atlantic oceans via a network of highways, railways, and advanced logistics hubs.

However, this mega-project faces competition from rival schemes – including one in Costa Rica which Saudi Arabia’s government reportedly expressed a firm interest in bankrolling.  

At one time, China had reportedly considered the Honduras Dry Canal’s route a potential investment opportunity.

It would be designed to handle massive freight capacities, offering a faster and more cost-effective alternative to maritime transit.

The Honduran ‘Corredor Seco’ or ‘Dry Corridor’ would link the Pacific ports of La Unión (El Salvador), Henecán (Honduras), and Corinto (Nicaragua) with the Caribbean hubs of Puerto Cortés (Honduras) and Puerto Barrios (Guatemala).  It would position Honduras as a central logistics hub for Central America.  

The project’s supporters see it as a scheme that could transform Honduras,  but questions about its financing and environmental impact remain unanswered.

Honduras is reportedly leveraging partnerships with regional governments and private investors, and has has backing from entities like the Central American Bank for Economic Integration. 

China was also linked with the project back in 2014 when it was estimated it would cost around £15.7bn ($20bn).However, Honduras faces competition.

Guatemala, El Salvador, Costa Rica, and Colombia also all have plans for a Panama Canal alternative. Last year, Costa Rica’s English language newspaper The Tico Times reported that  Saudi Arabia’s government was interested in investing its £12bn scheme – and this had encouraged Costa Rican officials to re-examine the canal’s feasibility.

However, the Honduran plan has been in the pipeline for decades.  The concept was first floated back in the early 1990s when Central America began exploring interoceanic transportation alternatives to the Panama Canal.

It gained momentum in the early 2000s, when active proposals and detailed planning for a ‘Dry Canal’ began. Honduras officially began pushing the project more seriously after 2010, as it sought to capitalize on its strategic geographic location between the Atlantic and  Pacific Oceans.

Recent updates suggest the project remains a priority for regional development.

However, significant financial and logistical hurdles continue to delay construction.​

In 2014, China Harbour Engineering Company was reported to be involved in feasibility studies for a $20 billion freight railway linking the two coasts.

Honduras has also reached out to other international investors, using its geographic advantage to position this project as a rival to the Panama Canal.