Project will reinforce China’s growing influence on global trade and weaken US dominance over a key shipping route
By Jonathan Watts
The Guardian (UK)
The Guardian (UK)
Nicaragua’s new waterway will be a higher-capacity alternative to the 99-year-old Panama Canal (pictured), which is currently being widened at the cost of $5.2bn. Photograph: Danny Lehman/Corbis
Nicaragua has awarded a Chinese company a 100-year concession to build an alternative to the Panama Canal, in a step that looks set to have profound geopolitical ramifications.
The president of the country’s national assembly, Rene Nuñez, announced the $40bn (£26bn) project, which will reinforce Beijing’s growing influence on global trade and weaken US dominance over the key shipping route between the Pacific and Atlantic oceans.
The name of the company and other details have yet to be released, but the opposition congressman Luis Callejas said the government planned to grant a 100-year lease to the Chinese operator.
The national assembly will debate two bills on the project, including an outline for an environmental impact assessment, on Friday.
Nicaragua’s president, Daniel Ortega, said recently that the new channel would be built through the waters of Lake Nicaragua.
The new route will be a higher-capacity alternative to the 99-year-old Panama Canal, which is currently being widened at the cost of $5.2bn.
Last year, the Nicaraguan government noted that the new canal should be able to allow passage for mega-container ships with a dead weight of up to 250,000 tonnes. This is more than double the size of the vessels that will be able to pass through the Panama Canal after its expansion, it said.
According to a bill submitted to congress last year, Nicaragua’s canal will be 22 metres deep and 286 km (178 miles) long – bigger than Panama and Suez in all dimensions.
Under the initial plans for the project, the government was expected to be the majority shareholder, with construction taking 10 years and the first ship passing through the canal within six years. It is unclear if this is still the case.
Two former Colombian officials recently accused China of influencing the international court of justice to secure the territorial waters that Nicaragua needs for the project.
In an op-ed piece for the magazine Semana, Noemí Sanín, a former Colombian foreign secretary, and Miguel Ceballos, a former vice-minister of justice, said a Chinese judge had settled in Nicaragua’s favour on a 13-year-old dispute over 75,000 square kilometres of sea.
They said this took place soon after Nicaraguan officials signed a memorandum of understanding last September with Wang Jing, the chairman of Xinwei Telecom and president of the newly established Hong Kong firm HK Nicaragua Canal Development Investment Company, to build and operate the canal.
Nicaragua has accused Colombia and Costa Rica, which has a claim on territory likely to be used by the new canal, of trying to prevent the project going ahead.
Additional reporting by Gareth Richards
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Chinese firm gets concession for Nicaragua canal
Source: AFP
China would get a 100-year concession to operate the canal, which would be considered a threat to the Panama Canal. However, members of the political opposition have accused leader Daniel Ortega’s plan of possibly being “fraudulent.”
Is it real? Nicaragua’s Daniel Ortega said China is going to build an inter-oceanic canal that will rival the Panama Canal. Opposition members say the project is a scam.
MANAGUA – Nicaraguan President Daniel Ortega has said a concession to build an inter-oceanic canal across his Central American nation was awarded to an unnamed Chinese consortium based in Hong Kong.
A lawmaker said the waterway would cost $40 billion to build.
Ortega made the announcement last Wednesday at ceremonies welcoming new ambassadors from Brazil, Canada, Switzerland, Saudi Arabia and Kuwait. He encouraged these countries to invest in the canal.
On Friday, members of the political opposition characterized the project as potentially “fraudulent.”
The ambitious canal idea, Ortega said, includes a conventional canal, a “dry canal” – a rail line – as well as two airports and an oil pipeline to move petroleum from the Caribbean to the Pacific.
Work on the canal should begin in May 2014 after a feasibility study is completed, the president said.
Ortega sent to the National Assembly a bill that would set the legal framework for building the canal.
Opposition lawmaker Eliseo Nunez told reporters the bill “would give a 100-year concession, like that given to the United States (to build and operate the Panama Canal), and that the Chinese were going to build the canal, which would cost $40 billion.”
Oddly, Nicaragua and China do not have formal diplomatic relations because of Managua’s ties with Taiwan. But Nicaragua and China maintain economic relations.
In September 2012, Ortega said that the China-based HK-Nicaragua company would conduct the feasibility study to build the canal. In the Wednesday announcement he mentioned no names, but did say the concession was given to a consortium based in Hong Kong and formed by Chinese companies.
The Sandinista Renovation Movement, an opposition group, said, Ortega “pretends to issue a concession, privileges and tax exemptions to an unknown company.” They demanded Otega issue environmental study and financial reports for the project.
“If this information isn’t provided, we are free to assume that this is a fraudulent plan, an operation with a paper company to issue a concession that will later be sold to other parties. It’s a corrupt operation that is an opportunity for fraudulent investors to make a lot of money,” the movement said in a statement.
Plans to build a canal across Nicaragua date back many years, but were overtaken in 1914 when the 82-kilometer (51-mile) Panama Canal was completed.
In recent years, however, Nicaraguan governments have revived the concept as a way to promote development in the poorest country in the Americas after Haiti.
When the National Assembly authorized building the canal in mid-2012, it said the project would be operated as a joint public/private partnership, with the state maintaining a 51 percent stake.
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