Canal Promise of ‘Big Chrimstas Present’ Nicaraguans

Nicaraguan canal protest

TODAY NICARAGUA – The interoceanic canal from the Pacific to the Caribbean coast of Nicaragua was firsr proposed a century ago. In a few weeks, on December 22, the canal becomes a reality as prepatory work begins, according to senior government official.

However, the path to the canal actually being built is yet clear, as many Nicaraguans and the sceintific community share their concern of possible widespread environmental damage.

Paul Oquist, a close adviser to Pesident, Daniel Ortega, said construction of roads and a wharf for the Chinese-run US$50 billion dollar  project would soon get under way.

“The Nicaraguan people will get a big Christmas present,” he said in an interview with the London based The Guardian. “It has always been pending and now it can happen.”

Oquist predicted the canal would double the GDP of Latin America’s second poorest country and allow the Sandinista government to achieve a long-held goal of eradicating extreme poverty. “There is nothing else in Nicaragua that could achieve that within our lifetimes – and it is within grasp. It has never been closer than it is now.”

nica-canal22The planned 275 kilometre route across the isthmus between the Caribbean (Atlantic) and Pacific overshadows the 77 kilometre Panama canal, which celebrated its 100th anniversary this year. In the first stage of the project, engineers will start construction in Brito of a wharf that can land giant trucks and excavators.

Bill Wild, the chief project adviser for HKND, the Chinese company that has put up the core financing and will manage the construction and running of the canal, said: “In the first year we’ll build the infrastructure to build the project – the roads and other means of access. The biggest challenge is not the technical engineering. This has all been done before. It is the logistics.”

There are concerns the project lacks transparency and is being rushed through without sufficient regard for its impact on society and the environment. The canal goes through an indigenous reserve and several environmentally sensitive areas including Lake Nicaragua, the largest source of fresh water in Central America.

The Academy of Sciences of Nicaragua recently expressed concerns and condemned the government and HKND for moving ahead without fully debating the implications with the scientific community. It called on the government to set up an independent committee to perform an impact assessment.

Under the canal concession law passed in 2012, the Nicaraguan state handed responsibility for environmental assessment to HKND. It in turn contracted the London-based consultancy Environmental Resource Management to conduct studies of the canal’s likely impact on the lake, wetlands and other ecosystems.

 Panama Canal, which will be dwarfed by Nicaragua’s new waterway. Photograph: Danny Lehman/Corbis
Panama Canal, which will be dwarfed by Nicaragua’s new waterway. Photograph: Danny Lehman/Corbis

According to Wild preliminary results would be announced this week. Coming only weeks before the start of construction, critics say the report will serve only as a rubber stamp. “Once the company has gained rights to build a canal, they’ll find a way to show that it is feasible. ERM is unfortunately just playing along with this game. I think they aren’t going to come out of this well,” said Jorge Huete, head of the Academy of Sciences of Nicaragua.

Oquist said extensive investigations had been carried out by ERM, the US consulting firm McKinsey and others, citing a figure of $900m (£575m) for the feasibility studies. He said the start of preparatory building work was just a form of hedging so that the project could move forward rapidly once the green light is given.

“I think there is a lot of confidence. One reason is that the very same firms did a lot of pre-feasibility work,” he said. “No one makes a $900m bet without information, so you think they must have pretty good information from the pre-feasibility studies that this is going to work out.”

He said time was crucial because the project funding relied heavily on billion-dollar loans. Any delay would mean extra interest repayments. HKND aims to complete the canal within five years, though this could prove ambitious.

There has also been opposition from farmers and other landowners who fear they will lose out in expropriation arrangements because the canal concession law gives them no scope to negotiate.

Oquist predicted their worries would be short-lived. “This entire issue has a short shelf life. It will expire when compensation kicks in,” he said. “The criteria is that at the end of the day, everyone’s going to be better off than they were before … The ones who complain will be the ones who miss out.”