Hong Kong firm wins US$40b Nicaragua canal project
The US$40 billion proposal by HK Nicaragua Canal Development Investment's (HKND Group) calls for linking Nicaragua's Caribbean and Pacific coasts and includes plans for two free-trade zones, a railway, an oil pipeline and airports
Nicaraguan lawmakers granted a 50-year concession to a Hong Kong-based company on Thursday for it to design, build and manage a shipping channel across the Central American nation that would compete with the Panama Canal.
The US$40 billion proposal by HK Nicaragua Canal Development Investment's (HKND Group) calls for linking Nicaragua's Caribbean and Pacific coasts and includes plans for two free-trade zones, a railway, an oil pipeline and airports.
The government says the canal, which has been discussed for decades, could boost the country's gross domestic product by up to 15 per cent.
"Today is a day of hope for the poor of this country," said Edwin Castro, a lawmaker in President Daniel Ortega's ruling party, before the vote marking final legislative approval of the deal.
The Hong Kong-based HKND group is headed by Chinese lawyer Wang Jing. He also leads Chinese company Xinwei Telecom Enterprise Group, which last year received a mobile-phone concession in Nicaragua.
"Central America is at the centre of North-South and East-West global trade flows, and we believe Nicaragua provides the perfect location for a new international shipping and logistics hub," Jing said in a statement after the plan's approval.
"We have a lot of work ahead, but we want to be clear that we intend this to be a world-class effort that creates economic opportunity, serves the global trade community, and also protects the local environment, heritage, and culture of Nicaragua."
Critics of the plan have railed against selling out state assets to the Chinese. After Thursday's vote, a group of opposition lawmakers left the chamber singing Nicaragua's national anthem before unfurling a banner that read, "Ortega: traitor."
About 100 people gathered outside the assembly to protest against the decision.
Last week Ortega said the government was going ahead with feasibility studies that should be done by 2015, when work on the canal could begin.
Those studies will define what route the canal will cut through the country. Any design would almost certainly bisect Lake Nicaragua, which is Central America's largest lake.
Advocates say the proposal plays to Nicaragua's natural strengths, which include low-lying land and the lake.
Still, the channel would likely be three times longer than the 77-kilometre Panama Canal.
The idea of a Nicaraguan shipping canal is almost as old as the country itself. The United States has eyed a trade route there since the 19th century, around the same time work began on the Panama Canal.
But for the project's Chinese backers, the timing appears right. China is the world's second-largest economy and one of the region's top consumers, snapping up Latin American commodities to drive domestic growth.