Newsmakers | Nicaragua
When Nicaraguan president Daniel Ortega announced last December a plan to construct a controversial transoceanic waterway that would provide an alternative to the Panama Canal, he vowed the project would create jobs and bring prosperity to the hemisphere’s second-poorest nation. However, farmers—traditionally part of the ruling Sandinista Party’s political base—have not only opposed the project but have taken their case to the Inter-American Commission on Human Rights in Washington, DC. The fate of the Nicaragua Interoceanic Grand Canal is consequently in limbo.
Touted as the largest infrastructure project in Latin American history, the Nicaragua Grand Canal has been on the drawing board since the early 19th century (it was once under consideration by the US government, which abandoned it in favor of a shorter Panama route). In 2013, Chinese telecoms magnate Wang Jing revived the project, offering to build and manage the canal, though providing little evidence of how the $50 billion waterway would be funded.
Without any public referendum and after minimal debate, legislators rubber-stamped a 50-year concession contract (renewable for another 50 years) that has generated rumblings even among Ortega allies, many of whom suspect Wang Jing’s company, HKND, may be the deal’s only winner.
Under the no-bid concession, HKND will keep all revenues from the canal’s operation and is not obligated to acquire lands at market prices or hire local workers and companies. An amendment also indicates that HKND may not be prosecuted for breach of contract.
“Something is clear, which is the interest in building the canal without interest in the consequences,” Jorge Huete-Pérez, vice president of the Nicaraguan Academy of Sciences, wrote in a study. “The foundation of the canal is not clear: there is no business plan, no data on the level of uncertainty nor the benefits.”
