Popular Mechanics did a detailed write-up on the canal expansion in 2006.
For a look at the neverending dredging and upkeep work that must be done simply to keep the Panama Canal from collapsing in upon itself, see Alan Weisman’s fascinating The World Without Us (Thomas Dunne Books 2007), which I recently read.
Another good book is David McCullough’s The Path between the Seas: The Creation of the Panama Canal, 1870-1914.
It was fascinating although wandering.
Speaking of wondering, Colibri, I don’t know how wondering about why a new canal hasn’t been dug obligates the wonderer to prove why it should. By the way, my cite is a map of Central America. See how much larger the blue spot in Nigaragua is to the blue dot in Panama?
Don’t boats need water to float?
What about the mingling of hitherto-separated Atlantic and Pacific marine species (which Cecil mentions as a concern)? What effect would that have?
I’ll go out on a limb and say… “bad.”
Several people have already given you pretty good reasons why it hasn’t, and probably won’t be. You seem to be more intent on arguing reasons why it should, than simply “wondering” why it hasn’t. Therefore it’s reasonable to ask you to provide some justification for your musings.
The amount of water available for the locks of course depends not on the size of the lake involved, but the amount of water flowing out of it. You have to compare the annual outflow, not the lakes. It is also critical how much water is available during the dry season.
This was a big concern when building a new sea-level canal in Panama was proposed in the 1960s. You could get things like the coral-munching Crown-of-thorns starfish from the Pacific destroying Caribbean coral reefs. Likewise the poisonous Black-and-yellow Sea Snake cross into the Caribbean.
In the 1980s there was a massive die-off of sea urchins in the Caribbean that started in Panama and is suspected of being due to a disease that passed through the Canal. The urchins grazed on algae, and since their demise some reefs have been largely smothered by seaweeds.
It’s simply politics, this is why so little gets accomplished today. Can you imagine trying to build the Interstate system now? It’d be held up for 50 years simply in lawsuits. Governments aren’t likely to invoke their rights to take property.
Now carry this over to the international area. The only real place to build the canal is another one in Panama or Nicaragua (though Columbia has a small area worth looking at, and Mexico has said it could be feasable, though I don’t see that).
Nicaragua was unstable for so long it would have to get a government behind it that could convince its people to really lobby for it. Panama will lobby just as hard against it, as they don’t want to lose ANY money. Even if the new canal just served the new huge ships the waits at Panama are too costly if another option is there.
Many other people say with container shipping a canal isn’t needed as it’s more cost effective to load on the gulf side, put a railroad across and reload on the pacific.
I remember an article in Look (or was it Life?) in which the path of a new canal was outlined and how many nukes it would take to clear the path.
The railroad’s already there - predates the canal, and does do some transloading (trans-shipping?) of containers across the isthmus. It’s currently run by the Kansas City Southern:
There was also an article about the railroad in the September 2002 Trains magazine:
Ah! Good old Project Plowshare
What’s so special about the last 4 miles of I-710 that it’s been delayed for so long?
It drives right through a fairly well-populated section of the city, and the people there didn’t want a freeway running through. In short, for much the same reason that San Francisco managed to keep US 101 from being completed through the city.
Should be noted that, at the time the litigation started, the freeway wasn’t signed as part of the Interstate system, but was California State Hwy. 7. I remember when St. 7 and St. 11 were just baby freeways… 
One of the last parts of the Interstate to be finished was I-287 – the New York City bypass.
The real reason is politics, 5 billion is nothing to business now-a-days. Panama is keeping a very heavy lobby against anyone trying to put in a canal elsewhere. How are China and India gonna get their ships through if Panama stops them because they helped finance a canal in Nicaragua? Sure AFTER the Nic canal is built but till then???
Also container shipping has become big and makes up a majority of shipping now. In fact Chicago built a huge port in the 50s in anticipation of the Saint Lawrence Seaway but container ships made that port unnecessary so it is so unused.
With container shipping it’s easier to load and unload so it’s actually pretty darn easy to bring two ships to either side of Nicaragua or Panama (Or even Mexico) and build a railroad, the unload ship on Atlantic, railroad it to the Pacific and go.
Lastly is the Monroe Doctrine which the US would pressure and apply to any nation trying to help finance a new canal. Sure it’s not direct intervention but most American presidents would see it as a severe step on America if another canal was built by China or India or anyone through Nic or Panama or Columbia.
Cite? How much is Panama paying for this lobbying effort? Can you link to some news articles on it?
Panama maintains the same policy as the US of allowing all shipping through. It would be extremely bad politics and bad business for Panama to block Chinese shipping. Since so much of global shipping is Chinese products, it would be absolutely insane from a business point of view to block Chinese shipping. This is a ridiculous suggestion.
How exactly is the US going to exert this pressure? Do you think the US is going to boycott Chinese goods?
If you don’t know how diplomatic pressure works, go ask about it in GQ.