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Thread: Nicaragua Announces Plans To Rival Panama Canal, Funded By China

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    Default Nicaragua Announces Plans To Rival Panama Canal, Funded By China

    Nicaragua Announces Plans To Rival Panama Canal With £25billion Channel Through The Country, Funded By China

    June 11, 2013

    A £25billion rival to the Panama Canal could be built across Nicaragua – funded entirely by the Chinese.

    The hugely ambitious engineering project would give China control of a vital waterway to challenge the one completed by the US in Panama nearly 100 years ago.

    Legislation paving the way for a new canal was given the go-ahead by Nicaraguan politicians on Monday night and is expected to be approved by the National Assembly tomorrow.

    The canal would cross the Central American country – one of the poorest in the region – from the Caribbean coast in the east to the Pacific coast in the west.

    It would thus compete directly with the 48-mile Panama Canal further south which gives ships a fast route between the Atlantic and Pacific oceans.

    About 130 miles of waterway would have to be dug, and 40,000 construction jobs could be created over the 11 years estimated for completion, according to the project’s supporters.

    When finished, they believe it could capture 4.5 per cent of world maritime freight traffic and double Nicaragua’s per capita gross domestic product.

    A China-based consortium would finance the construction in return for a majority share in earnings from the potentially lucrative new shipping route.

    Daniel Ortega, Nicaragua’s socialist president, is backing the waterway enthusiastically.

    But many outside observers and Ortega opponents point out that nearly every key detail remains a mystery, from the exact sources of the funding to Nicaragua’s share of the profits and the precise route.

    Critics have also been asking whether Central America needs two canals, even in an age of growing world trade. Panama’s is already being expanded to take bigger ships.

    Feasibility studies have indicated six potential routes across Nicaragua, many connecting with Lake Nicaragua in the west, but the legislation does not indicate which one would be dug.

    The government plans to grant the Chinese HK Nicaragua Canal Development Investment Co Ltd a concession for an initial 50 years, with the possibility of extending it another 50.

    Construction of a Nicaraguan canal would mark the end of a saga dating back to the 19th century when US shipping and railroad magnate Cornelius Vanderbilt won the right to build a waterway across the country but gave up amid political turmoil.

    Other US interests then studied building a canal in Nicaragua before settling on Panama where an attempt by the French to build a canal had ended in failure. The US took over and completed the job in 1914.

    The canal was owned by the US until 1999 when it was handed over to the Panamanian government.

    A second waterway linking the Atlantic with the Pacific has long been in the planning, however.

    The steady increase in shipping since the opening of the Panama Canal means there is plenty of financial incentive.

    And with the emergence of China as a resource-hungry economic superpower, the route is now more likely than ever to become a reality.

    Jaime Incer, an environmentalist and adviser to the presidency on environmental issues, said authorities should be defining a specific route for the canal before approving a concession.

    'There are at least six proposed routes and five of them include Lake Nicaragua, but there is nothing definite, that's all part of the unknown,' he said.

    Deputy Foreign Minister Manuel Coronel, who is chairman of the country's Grand Canal Authority, said Monday that he had no doubt the Chinese company would carry out the project.

    'It's a very serious company, very responsible and recognized,' Coronel said. 'To doubt (the company) is to oppose the project for political rather than realistic issues.'

    The Hong Kong-registered company has said that it is willing to fully study the technological, economic, environmental and social impact of the project.

    'This is a great project that has the potential to transform international trade and bring significant economic and social benefits to Nicaragua, their neighbors and Latin America,' company spokesman Ronald Maclean-Abaroa said Monday on the group's website.

    Under the deal, the Chinese company would pay Nicaragua $10million annually during the first decade, then pay it a share of canal revenues - an amount that would begin at 1 per cent and rise to an unspecified percentage over the life of the concession. After completing the concession, the Chinese company would have to turn over to Nicaragua all buildings and other canal infrastructure.

    Jose Aguerri, who heads an association of Nicaraguan chambers of commerce, said the lack of details released about the project would slow investment.

    'Until you define the path that the canal will have, it will be difficult to attract investment to the area because there is no legal certainty,' Aguirre said after meeting with committee members.

    Another Hong Kong-based company has been operating port facilities on both ends of the Panama Canal.

    The Nicaraguan canal's construction would mark the end of a long push that began at least as far back as the 19th century when U.S. industrialist Cornelius Vanderbilt won the right to build a waterway across the country but gave up amid political turmoil.

    Other U.S. interests then studied building a canal in Nicaragua before settling on Panama as the crossing point.

    Panama is nearing the end of a seven-year, $5.2billion expansion project to allow bigger ships to use its waterway. That project is scheduled to be finished next year.

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    Default Re: Nicaragua Announces Plans To Rival Panama Canal, Funded By China

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    Default Re: Nicaragua Announces Plans To Rival Panama Canal, Funded By China

    Nicaragua Launches Construction Of Inter-Oceanic Canal

    December 23, 2014

    Chinese company HKND launched work Monday on a $50bn canal linking the Pacific and Atlantic Oceans

    Nicaragua has announced the start of work on a new canal linking the Atlantic and Pacific Oceans.

    At an opening ceremony, Wang Jing, the president of HKND, the Chinese company building the canal, said this moment would go down in history.

    The 278km (172 mile) waterway will be longer, deeper and wider than the Panama Canal.

    But critics fear a negative environmental impact and doubt its viability and economic benefits.

    The Grand Canal of Nicaragua, as it has been called, aims to rival Panama's waterway and lift the country out of poverty.

    The opening ceremony was largely symbolic, as work began on an access road for machinery needed to build a port for the canal on Nicaragua's Pacific coast.

    Nicaragua's Vice-President Omar Halleslevens said the canal would change the history and the economy of Nicaragua, one of Latin America's poorest countries.

    "With this great canal, Nicaragua expects to move 5% of the world's commerce that moves by sea, which will bring great economic benefits and double the GDP (gross domestic product),'' said Mr Halleslevens.

    Analysis: Arturo Wallace, BBC News, Nicaragua

    There is a clear sense of expectation here, where the construction of a man made passage between the Pacific and Atlantic oceans designed to dwarf the Panama Canal has officially begun.

    But there is also tension: over the past few weeks protests against the canal have increased.

    And the authorities' decision to hold the main groundbreaking ceremony in Managua, some 120km away from where the waterway is to built, won't help convince the many sceptics who still doubt the project's viability.

    The government claims that the project, awarded to a Hong Kong based international consortium, will finally lift the Western hemisphere's second poorest country out of poverty.

    But many fear environmental damage may outweigh the economic benefit, or oppose the extremely generous terms offered to the Chinese investors. Those who live on the projected route simply don't want to lose their land and livelihoods.

    HKND says it expects the project to be finished within five years and operational by 2020, and to cost about $50bn (£32bn).

    The project is to include two ports, an airport, a resort and an economic zone for electricity and other companies.

    Protests against the construction of the canal have increased in recent weeks

    But some have questioned the canal's financial soundness and allege that Wang Jing lacks experience in developing or financing big infrastructure projects.

    Opponents are also concerned about the impact construction may have on Lake Nicaragua and on poor communities in the area.

    The route announced in July would pass through the lake, an important source of fresh water.

    Environmentalists have warned of the risks of damming rivers and moving large amounts of soil. Communities along the route have staged protests.

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    Default Re: Nicaragua Announces Plans To Rival Panama Canal, Funded By China

    Doubts Deepen Over Chinese-backed Nicaragua Canal

    December 26, 2014

    When one of the poorest countries in the Americas and a little-known Chinese businessman said they planned to undertake one of the biggest engineering projects in history, few people took them seriously.

    A year and a half after the $50 billion project to build a canal across Nicaragua was launched by President Daniel Ortega, a former Marxist guerrilla, the doubts have only grown.

    Work officially began this week. But reporters hoping to see any evidence of how it would be done in a fraction of the time it took to build the much-shorter Panama Canal, or discover who would pay for it, were left with more questions than answers.

    At events marking the start of what is meant to be a five- year job, Nicaraguan officials and the Hong Kong-based company behind the canal dodged questions about its financial backers, mounting delays and whether Washington had been consulted.

    So far the company, the HK Nicaragua Canal Development Investment Co Ltd, or HKND Group, of telecoms entrepreneur Wang Jing, has identified only $200 million in funding.

    Such is the skepticism that even those with most to gain from the project, whose estimated cost is four times Nicaragua's gross domestic product, acknowledge it looks far-fetched.

    "The canal has one enemy and that's the lack of information," said Benjamin Lanzas, head of Nicaragua's construction industry group, who met Wang in China. "That lack of information has created a great deal of speculation, and that speculation, those expectations, have created a lot of doubt."

    Supporters point to Monday's start as evidence that the plan is on schedule. But key feasibility studies on the canal have been pushed back to next April, and excavation work is not due to begin until the second half of next year.

    At 172 miles (278 km), the waterway is over three times the length of the 100-year-old Panama Canal, which was completed by the United States 34 years after French engineers began it.

    The five-year timetable in Nicaragua has led many to surmise the Chinese government is secretly bankrolling the plan, which both China and Wang have repeatedly denied.

    Yet Wang's reluctance to reveal his backers or much of his business background has failed to dispel suspicions.

    "If the canal goes ahead ... it will be because the Chinese government wants it to, and the financing will come from China's various state firms," said Arturo Cruz of the INCAE business school, an ex-Nicaraguan ambassador to the United States.

    Ortega has sought to allay fears that China is gaining a strategic foothold in Central America.

    "The Chinese haven't arrived in Nicaragua with occupying troops," he said during a speech this week.

    For now, China's government can stay aloof and claim no part in the project in case it founders, experts say.

    "If the Chinese government is behind this project, it has to be responsible for everything," said an official from Taiwan's embassy in Nicaragua, speaking on condition of anonymity. "If it fails, that's a bad image. They have to maintain their distance."

    China's involvement would be a direct challenge to the United States, which controlled the Panama Canal until 1999.

    The U.S. Embassy declined to comment, even though Nicaragua says the United States has welcomed the project.

    Regardless of whether the canal is built, China's presence in Central America looks likely to be strengthened.

    "The aim is the canal," said Cruz, the ex-ambassador. "But even if they only build a Caribbean port, this country will have achieved something it hasn't managed in 500 years."

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