Nicaragua launches work on canal project

Some 18 months after the highly controversial concession was granted to the Hong Kong-based HKND Group, Nicaragua has officially begun work on its hugely ambitious interoceanic canal project.

“This moment will surely go down in history. I announce the start of work on the great canal of Nicaragua,” HKND boss Wang Jing said at the official ceremony, held in the municipality of Rivas in the southwest and attended by the country’s Vice President Omar Halleslevens.

“With this great canal, Nicaragua expects to move 5% of the world’s commerce that moves by sea, which will bring great economic benefits and double the GDP,” Halleslevens said.

The ceremony is said to have been “largely symbolic”, marking the start of work not on the canal proper, but on an access road for use by machinery needed to begin construction of a new port on the Pacific coast.

The 170-mile ‘Grand Canal of Nicaragua’ will be deeper and wider than the Panama Canal, enabling larger vessels to transit, but at three times the length of its rival, industry experts have questioned its viability.

The government claims that construction will be complete by 2019, with operation beginning the following year.

Much scepticism continues to surround the project, which has a projected cost of US$40-50bn, equivalent to more than four times Nicaragua’s GDP.

Many believe that HKND is a front for the Chinese government seeking to establish a foothold in a region where the U.S. has historically held sway, fears the Nicaraguan government has been quick to deny.

“This is not the Chinese turnkey project where they bring in all of the workers, every last nail, and every last noodle, and only buy a little diesel to get the machines they bring in running,” said presidential advisor and spokesman Paul Oquist recently.

For its part, the government, led by President Daniel Ortega claims that the canal will lift the country, the second poorest in the western hemisphere, out of poverty.

The concession also provides for a pair of ports, one on each coast, an airport, a resort and an economic zone for electricity and other companies.

However, some claim that the terms of the concession are too generous, allowing vast tracts of land to be purchased well below market rates.

As CM has reported, protest activity along the proposed route and in the capital has increased in recent weeks, with marchers chanting anti-government slogans and waving flags and banners.

Al Jazeera reports that “earlier this month, residents of Obrajuelo, a fishing village on the banks of Lake Nicaragua, threw stones at an SUV carrying a Chinese team that showed up to survey the land.

“The following day, the residents burned tires on the Pan-American Highway, blocking it for hours.”

Many of the anti-canal protesters are those who stand to lose their homes to the development.

Environmentalists also have grave concerns about the ecological damage that could be wrought by the vast infrastructure works.