Honduras, a Central American nation, has grand designs for a $20bn infrastructure behemoth that could give the legendary Panama Canal a run for its money.

The country is eager to establish a ‘dry canal’, linking the Pacific and Atlantic oceans through an intricate network of highways, railways, and state-of-the-art logistics centers.

However, this colossal project isn’t without competition – it faces stiff rivalry from similar ventures, including one in Costa Rica that has reportedly piqued the interest of the Saudi Arabian government as a potential investment.

At one point, even China had purportedly eyed the route of the Honduras Dry Canal as a prospective investment opportunity.

Designed to accommodate hefty freight volumes, the dry canal promises to be a quicker and more economical alternative to sea transport.

The Honduran ‘Corredor Seco’ or ‘Dry Corridor’ would connect the Pacific ports of La Union (El Salvador), Henecan (Honduras), and Corinto (Nicaragua) with the Caribbean hubs of Puerto Cortes (Honduras) and Puerto Barrios (Guatemala). This would strategically position Honduras as a key logistics hub in Central America.

While proponents of the project view it as a transformative opportunity for Honduras, lingering questions about its funding and environmental impact remain unresolved.

Reportedly, Honduras is capitalizing on partnerships with regional governments and private investors, and has received support from organizations such as the Central American Bank for Economic Integration.

China was previously associated with the project in 2014 when it was projected to cost approximately £15.7bn ($20bn). However, Honduras isn’t alone in this race.

Guatemala, El Salvador, Costa Rica, and Colombia are all sketching out their own alternatives to the Panama Canal. Just last year, The Tico Times, an English language newspaper in Costa Rica, reported that Saudi Arabia’s government showed interest in pouring funds into its $15bn scheme, prompting Costa Rican officials to revisit the canal’s feasibility.

The Honduran plan, however, has been simmering on the back burner for decades. The idea first surfaced in the early 1990s when Central America started scouting for interoceanic transportation substitutes to the Panama Canal.

The concept picked up steam in the early 2000s, with active proposals and meticulous planning for a ‘Dry Canal’ taking shape. Post-2010, Honduras officially began championing the project more fervently, leveraging its strategic geographic position between the Atlantic and Pacific Oceans.

Recent updates indicate that the project still ranks high on the regional development agenda.

However, substantial financial and logistical roadblocks continue to stall construction.

In 2014, reports emerged of China Harbour Engineering Company’s involvement in feasibility studies for a $20 billion freight railway connecting the two coasts.

Honduras has also extended its hand to other international investors, using its geographic edge to pitch this project as a formidable competitor to the Panama Canal.