Nicaragua’s controversial canal


Almost 450 years after Spain’s King Philip II first contemplated creating a waterway joining the Atlantic and Pacific Oceans in Nicaragua, the idea is now set to become a reality.

On 7 May 2014, the government insisted, once again: “The construction of the canal will start in December.”

And it will be open for business by 2019, ensures Chinese entrepreneur Wang Jing, head of the Hong Kong Nicaragua Development Group (HKND) in charge of the venture.

In between lies a construction project of pharaonic proportions, the “Inter-Oceanic Grand Canal of Nicaragua,” as it is called in Managua, the country’s capital.

And it involves more than the canal itself. Aside from the waterway, the government and HKND Group, registered in the Cayman Islands and headquartered in Hong Kong, also plan to build “two deepwater ports at the entrance and exit of the canal, two airports and several industrial zones, as well as an oil pipeline and a railway that will run alongside the canal,” as detailed in the legislation passed on the matter.

As for the dimensions, they are huge: the canal will be almost 300 kilometres long, 520 metres wide and 27 metres deep.

Big enough to accommodate 400,000-tonne supertankers transporting oil or up to 12,000 containers, something the Panama Canal would be unable to offer, even if the – currently stalled – plans to widen it were to go ahead.

The cost of the megaproject and subprojects is equally impressive: “It should cost US$40 billion,” – four times Nicaragua’s annual GDP – estimates Wang Jing.

The economic impact is expected to be immediate: “According to some government advisers, the canal has the potential to increase Nicaragua’s annual growth from 4.5 per cent to as much as 15 per cent in 2016, and then back down to 8 per cent per year,” said Jorge Huete-Pérez, director of the Molecular Biology Centre at the University of Central America in Managua, in an interview with National Geographic in February of this year.


Environmental risks

Huete-Pérez warns that the environmental impact and feasibility studies are not being carried out by the government itself but are being left up to the Chinese company and its subcontractors.

In a paper published in Nature, jointly written with Austrian scientist Axel Meyer, he calls for two things: “First, independent assessments of the repercussions of this mega-project; and second, that the Nicaraguan government halt the project should the assessments confirm fears that this canal will yield more losses than gains for the region’s natural resources, indigenous communities and biodiversity.”

As it stands, the concession agreement allows HKND to choose the route it deems best for the future canal and to legally expropriate the property of any persons or communities living along the route selected, as well as granting it the rights to any natural resources found there.

“The government has virtually handed over the whole national territory for HKND to choose from. And the indigenous communities that had been granted land rights by the constitution are going to see them taken away from them,” protests lawyer Mónica López Baltonado, who is conducting a variety of lawsuits on the matter.

Three communities also took the case to the Supreme Court of Nicaragua, but their complaint was rejected in December 2013. They are now referring it to the Inter-American Commission on Human Rights.

Another potential victim of the future canal, according to several scientists, is Lake Nicaragua, the largest source of drinking water in Central America.

Each one of the six routes being studied passes through it. And yet its average depth is around fifteen metres. Where the future canal passes – around 90 km across the lake – it will have to be doubled.

“This canal is not a good thing for us,” Luis, who organises boat trips on Lake Nicaragua from Granada, told Equal Times. “The water level on the lake is likely to go down, and yet it’s only four metres deep here. If the water level drops, our boats won’t be able to cross it anymore.”

A potential fall in the lake’s water level is not the only environmental concern. “It would take over 20 years to recover from the smallest oil spill. And yet we could sell this drinking water,” suggests Salvador Montenegro Guillén, director of the Aquatic Resources Investigation Centre.

The infiltration of saltwater through the locks system is also likely to disrupt this unique biotope, which is home, for example, to the world’s only listed freshwater sharks. In addition, invasive species or bacteria could be introduced into the lake by the freighters.

But that is not all. Huete-Pérez and Meyer point to a range of other dangers: “400,000 hectares of rainforests and wetlands will be destroyed; the risk of drought and flooding will increase; the millions of tonnes of sludge dredged out will damage the places where it is dumped; endangered sea turtles will lose important nesting habitats; animal populations will be deprived of their wide migration route on the east coast of the country and find themselves confined to smaller territories...”

The initial conclusions of the studies commissioned by HKND will no doubt have more to say about these dangers and the way the company and the government intends to deal with them. On 8 May, however, Paul Oquist, Minister for National Policies, confided that the first conclusions will not arrive until around June 2014.

Yet another delay in the reports has been expected since April. That has not, however, prevented Russia from officially expressing its interest in taking part in the project.

This interest comes in addition to that of the United Kingdom and the United States, which had already expressed theirs, and is an interest that is all the more pressing given that, according to the government’s timeframe, the digging is due to start in just over six months.