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Will $40B Nicaragua Canal go forward?

PROGRAM/PROJECT NEWS 

21 August 2013 – Managua, Nicaragua – In June 2013, Nicaragua’s National Assembly approved a bill to grant a 50-year concession to a newly formed Hong Kong company, the Hong Kong Nicaragua Canal Development Investment Co., to build the Inter-Oceanic Nicaragua Canal , a proposed waterway through Nicaragua to connect the Caribbean Sea and Atlantic Ocean with the Pacific Ocean. Since then numerous international media have reported about the proposed mega-project, the parties involved, the economics and politics of the venture, and the apparent disagreements in both China and Nicaragua about the venture.

Nicaragua panama canal locator.jpgAccording to Wikipedia, such a canal would follow rivers up to Lake Nicaragua (the second largest lake in Latin America) and then at least 10 km through the isthmus of Rivas to reach the Pacific (via a canal dug from Brito). Construction of such a canal along the route using the San Juan River was proposed in the early colonial era. The United States abandoned plans to build such a canal in the early 20th century after it purchased the French interests in the Panama Canal at a reasonable cost.  Speculation on a new canal continues as the steady increase in world shipping may make it an economically viable project. The proposed Nicaragua Canal will be able to handle the world’s largest ships, including the 10 percent of the world’s merchant fleet that are already too large for even the new set of locks being constructed in Panama. [1]

Both the viability and the likelihood of the canal are being questioned since the concession was awarded in June.

According to the Telegraph on 30 July, the dream has moved a step closer to reality as a Chinese entrepreneur unveiled his route for a 170-mile, £26 billion waterway from the Pacific to the Caribbean. If Wang Jing, an intensely private 40-year-old businessman from Beijing, pulls off the feat, it will rank as one of the greatest engineering marvels in history.

But sitting in the offices of his telecommunications company in an industrial park north of Beijing, Mr Wang is clearly very serious and very determined to succeed. “I am 100 per cent certain the construction will begin in December 2014 and we will finish in five years in 2019,” he said. He added that while a feasibility report is still ongoing, “the framework” of the project has been decided. “There will be small changes but no big changes”. [2]

According to Fox News on 31 July, the U.S. public and private sectors might be willing to invest in the construction of a $40 billion “Nicaragua Canal” that would rival the Panama Canal, according to a U.S. Department of Commerce official.  Deputy Assistant Secretary Walter Bastian said that he finds the project “fascinating” and that the U.S. government will follow up to see if there is interest from U.S. investors. [3]

On August 6, 2013, Nicaragua’s political opposition filed a Supreme Court challenge to the hastily approved canal law, arguing that the generous concession granted to an unknown Chinese firm violates 15 articles of the constitution, including national sovereignty. The opposition claims the concession – which will convert a giant swath of the country into a privatized canal zone, owned and operated for 50 years by Chinese businessman Wang Jing – violates constitutional guarantees to private property, natural resources, and indigenous lands. [4]

There are many other stories about this project on the web, just conduct a search on “Nicaragua Canal”.  If you have a comment, send an email to [email protected]

References: 

[1]       http://en.wikipedia.org/wiki/Nicaragua_Canal

[2]       http://www.telegraph.co.uk/news/worldnews/asia/china/10212169/Chinese-entrepreneur-reveals-route-for-Nicaraguan-canal.html

[3]       http://latino.foxnews.com/latino/money/2013/07/31/us-willing-to-invest-in-new-nicaragua-canal-to-rival-panama-canal/

[4]       http://www.csmonitor.com/World/Americas/Latin-America-Monitor/2013/0807/Nicaragua-s-canal-controversy-builds