Tue, Dec 17, 2013 - Page 9 News List

Nicaragua in thrall of canal dream, worries remain

Plans to build a canal three times the length of the Panama have been approved for a Beijing-based telecom CEO, while critics’ warnings are being ignored

By Michael Weissenstein and Luis Manuel Galeano  /  AP, MANAGUA, Nicaragua

Illustration: Yusha

Six months after the Sandinista government granted a Chinese businessman a 100-year concession to build a vast canal across Nicaragua, most of the nation is in the thrall of the imagined waterway.

In the capital, Managua, Nicaraguans snap photographs of the plaster Virgin Mary, perched on an altar against the backdrop of a supertanker traversing the country’s biggest lake. “Virgin Mary, bless the great trans-ocean canal!” declares the government-sponsored invocation behind her.

From boardrooms in the capital to hamlets where goods move by horse cart, Nicaraguans say they are confident the US$40 billion canal will become reality, lifting their country from poverty to prosperity. The national university system announced this summer that it will create majors in metallurgy and port management, as well as Chinese language classes, in service of the canal.

Warnings by legal and environmental experts that the waterway is economically unfeasible, ecologically risky and a bad deal for Nicaragua are virtually unheard in a country where Nicaraguan President Daniel Ortega has consolidated control of every major state institution, as well as much of the media. Opposition charges that Ortega is conjuring a canal to win support for unlimited re-election are falling on deaf ears.

“The inter-ocean canal will mean great growth for Nicaragua, for the president and for the people too,” architecture student Daniel Ellis, 19, said as he posed by another government altar celebrating the waterway.

After three days of discussion in June, the National Assembly controlled by Ortega’s Sandinista Party approved giving Beijing-based telecom CEO Wang Jing (王靖) a 50-year renewable concession to build a canal more than three times the length of the Panama Canal, as well as tax-free side projects including ports on Nicaragua’s Pacific and Atlantic coasts, an oil pipeline bisecting the country, a cargo railway, two free-trade zones and an international airport.

The deal would pay Nicaragua US$10 million a year for 10 years and gradually transfers ownership to Nicaragua, handing over 100 percent after a century. However, the payments and the transfer only begin if and when the canal begins operation. Under the agreement, Wang can skip building the canal altogether but plow ahead with the other projects.

Critics fear this will leave Wang with a host of lucrative tax-free enterprises and Nicaragua without the centerpiece of the deal or revenue from what actually gets built.

“This is an astounding giveaway,” Harvard Business School Latin American development expert Noel Maurer said. “It’s just kind of like, here’s a bunch of privileges, go build something.”

“This is a worse deal than the original Panama Canal deal, which was not a good deal and not a deal that Panama voluntarily signed,” Maurer added.

Manuel Coronel Kautz, a veteran Sandinista leader who manages Nicaragua’s Great Inter-Oceanic Canal Authority, said the government was confident the canal would “generate an enormous number of jobs for an impoverished country.”

Chief project adviser Bill Wild said Wang is spending large amounts of his own money to dispatch dozens of Chinese, Nicaraguan and Western experts around the country to conduct environmental and geological feasibility studies to be completed in the coming months.

“He’s not out there just to build these sub-projects,” Wild said. “The canal is his vision, there’s no doubt of that if you talk to the guy.”

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