The dream of a canal across the isthmus of Central America goes back to the time of colonial New Spain, when some preliminary surveys were taken. The most likely routes were either across Nicaragua, Panama, or the Isthmus of Tehuantepec in Mexico.
The idea of the Nicaragua canal was revived with more seriousness by the new nation of the United States of Central America in 1825. That year the Central American Federal Government hired surveyors to chart the route and contacted the government of the United States of America with hopes that with North American finance and engineering help the canal could be built to the great advantage of both nations.
A survey from the 1830s said that the canal would be 278 kilometers (172 miles) long and would generally follow the San Juan River from the Atlantic to Lake Nicaragua, then go through a series of locks and tunnels from the lake to the Pacific.
The Nicaragua Canal idea was repeatedly discussed seriously by businessmen and governments throughout the 19th century. At the start of the 20th century Nicaraguan president José Santos Zelaya attempted to arrange for Germany and Japan to finance the canal, but this was opposed by the USA, which by then was preferring the Panama route, and the Nicaragua plans fell through.
At various times since the Panama Canal opened, the route has been reconsidered; it would shorten the water distance between New York and San Francisco by nearly 800 kilometers (500 miles). Under the Bryan-Chamorro Treaty of 1916, the United States paid Nicaragua US$3 million for an option in perpetuity and free of taxation, including 99-year leases to the Corn Islands and a site for a naval base on the Gulf of Fonseca. Costa Rica protested that Costa Rican rights to the San Juan River had been infringed, and El Salvador maintained that the proposed naval base affected both it and Honduras. Both protests were upheld by the Central American Court of Justice; the court rulings are ignored by both Nicaragua and the United States.
Recently new plans for the Nicaragua canal are under discussion. This canal is planned to be wide and deep enough for container ships of the Post-Panamax class. The current Panama Canal is not deep enough for these type of vessels. Three routes are under consideration, starting on the Atlantic side either in Bluefields, Punta Gorda, or San Juan . It would generally follow rivers to Lake Nicaragua near the southern shore and across the narrow isthmus of Rivas to the Pacific Ocean. Overall, the canal would be 400km long. The estimated costs are 25 billion dollars, and the estimated construction time is 10 years. President Enrique Bolaños is trying to acquire foreign investors to support the project. Environmentalists, however, protest the canal because of the damage to the rivers and the jungle.