Nicaragua To Start Construction On Canal, Rivalling Panama’s, By December

January 12, 2014Nicaraguaby EW News Desk Team


Nicaragua will finally begin construction on a $40 billion inter-oceanic waterway – that will rival the Panama Canal in scope and size – by the end of the year, said President Daniel Ortega on Saturday, following an agreement with a Chinese company on the future rights and management of the project.

“The Nicaraguan government and HKND Group are pleased to confirm that canal construction work will begin as planned in December 2014,” Ortega announced alongside Chinese tycoon Wang Jing, whose group has been given a concession to manage the future shipping channel for 50 years, with the possibility to renew the contract for another 50.

The 170-mile shipping route from the Pacific Ocean to the Caribbean, traversing Nicaragua, is expected to take five years to complete, with the development set to be one of Central America’s largest-ever investments, potentially breaking Panama’s monopoly on shipping through Central America.

The Nicaraguan canal would be more than three times as long as the Panama Canal’s 50 miles, and the project also includes an oil pipeline, a railroad and two airports.

The Nicaraguan government has said that it hopes the project would boost economic growth by up to 10 percent per annum.

The construction of the canal was announced last June, but had been delayed due to an environmental and economic risk assessment. According to Hispanically Speaking News, Opposition political parties, non-governmental organizations, defenders of human rights, businessmen, lawyers, environmentalists and a number of dignitaries had filed a legal challenge to block the project, but the Supreme Court ruled in December that it did not violate the constitution.

Opponents say the project is not financially feasible and have raised concerns about displacing indigenous groups and damage to the environment.

Just last week, Manuel Coronel Kautz, president of the Nicaraguan canal authority, told a national newspaper that construction may be delayed till 2015 to resolve the legal complication, as well as to determine the canal’s path.

However, Ortega and Wang moved quickly to dismiss these suggestions by announcing the construction date.

Addressing the environmental concerns, Wang told The Telegraph last year that protecting the area was a key priority.

“I take all responsibility for any environmental damage. I have told my employees that if we make a mistake on this front, we will be dishonoured in the history textbooks of Nicaragua,” he said.

The Panama Canal, which celebrates its centenary this year, has struggled to keep up with the increase in global shipping as more goods are exported from Asia to Europe and the U.S. east coast.

Plans to upgrade the canal has also been delayed as the Panama government refuses to make an additional $1 billion payment to the contractors for unforeseen costs.

Related: Panama Canal Expansion Threatened By Cost Dispute

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