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Nicaragua, the Canal to Rival Panama?

Bottom line: Is the Nicaragua canal even feasible? Not in the timeframe and budget set forth by HK Nicaragua Canal Development Investment Co. Ltd. (HKND). If the project happens, much of the financing is likely to come from the Chinese government, which may consider the project a worthy strategic goal of planting a ‘flag’ in Latin America and helping facilitate global trade on their own terms.

On 13 June, the ruling Sandinista National Liberation Front (FSLN) pushed through a vote in Nicaragua’s National Congress on the “great inter-oceanic canal law” (Law 840). As set forth in that bill, HKND has the sole rights to build an inter-oceanic canal deeper and wider than the Panama Canal and operate it for 50 years, with the possibility to extend the operations contract for another 50 years. The language of the law is extremely favorable to HKND, precluding lawsuits over environmental damages and including plans to build and run a parallel railway (“dry canal”), an oil pipeline, deep-water ports at either end (e.g. Corinto and Monkey Point), at least one major airport, and free-trade zones.

Votes came in entirely along party lines, with every Sandinista congressional representative voting for the bill, except one: Olga Xochilt Ocampo Rocha. On 24 June, Ocampo--who actually refrained from voting either for or against the bill--received a notice from the Supreme Electoral Council (CSE) that she was being removed from office, without further explanation. At the end of the day even indigenous legislator Brooklyn Rivera--who spoke to his colleagues of the unjust seizure of indigenous land contemplated by current canal plans and warned of the risk in violating indigenous rights in the Región Autónoma del Atlantico Sur (RAAS)--voted with his party, the Sandinistas.

On 6 August, the opposition Liberal Party filed a case with the Supreme Court asking them to rule the law unconstitutional, arguing that the contract violates laws that guarantee national sovereignty, protect indigenous land (Law 445) and ownership of private property . They point out that there was no discussion with municipal governments and the contract was awarded without a public solicitation of bids (violating Law 37).

Although the final vote in the legislature was 61-25 in favor of granting HKND the canal concession, public attitudes are much more suspicious of the new law. Rumors are circulating that the entire initiative…




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