Home' Trinidad and Tobago Guardian : June 20th 2013 Contents BG24 | TRADE
BUSINESS GUARDIAN www.guardian.co.tt JUNE 2013 • WEEK THREE
MANAGUA, Nicaragua ---
For centuries, tycoons and
adventurers alike have
dreamed of building a
canal through Nicaragua
between the Pacific and Atlantic oceans and
riding a boom in international trade to new
riches. Up until now, however, all comers
were forced to admit defeat when faced with
the sheer challenge of building a man-made
river through dense, hilly jungle.
Now, the old dream is attracting a new
hopeful, and this time from the other side
of the world.
The Chinese company, HK Nicaragua
Canal Development Investment Company
Ltd, is working with the Nicaraguan gov-
ernment on a massive canal project experts
say could take 11 years to finish, cost US$40
billion and require digging about 130 miles
(200 kilometres) of waterway.
Canal proponents say the waterway could
create 40,000 construction jobs and essen-
tially double the per-capita gross domestic
product of Nicaragua, one of the poorest
countries in Latin America. The government
plans to grant the Chinese company a con-
cession for 100 years.
That s sparked hopes of an economic gold
rush in Nicaragua, and President Daniel
Ortega has pushed approval of the canal
through the country s congress. Ortega pre-
sented the canal proposal Tuesday and hopes
to submit it to at least an initial vote on
Monday, with final approval planned by next
"This is a question of a project that is
very important for the country, and that is
why it is being given urgent priority," said
congressional leader Rene Nunez, an Ortega
The opposition Sandinista Renovation
Movement, which split in 1995 from Ortega,
has tried to slow down the debate by
demanding more information about the
developers, while other critics have ques-
tioned the plan s viability just a few hundred
miles northwest of the Panama Canal.
The Chinese company s director, Wang
Jing, is also listed in the same role in 12
other existing or dissolved Hong Kong com-
"If this information isn t forthcoming, we
can assume this is a swindle, a deal with a
front company to get a concession, and then
sell the rights to someone else," the reno-
vation movement party said in a statement.
"It s a corrupt deal to make a lot of money
with fake investors."
Just as the Panama Canal was a projection
of growing US power at the start of the 20th
century, the Nicaragua project already reflects
China s influence and financial clout around
the world. Another Hong Kong-based com-
pany has been operating port facilities on
both ends of the Panama Canal.
Panama: The crossing point
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
US. industrialist Cornelius Vanderbilt won
the right to build the waterway but gave up
amid political turmoil.
Other US interests then studied building
a canal in Nicaragua before settling on Pana-
ma as the crossing point.
This time around, critics have been asking
whether Central America needs two canals,
even in an age of growing world trade.
"Forty billion dollars is an extremely high
amount and based on my experience and
the studies we have done on world trade
flows, the amount of traffic that would be
needed to pay for a project of this size
doesn t exist," said Eduardo Lugo, a Pana-
manian private consultant who s worked on
traffic-demand calculations on the ongoing
Panama Canal expansion.
Jason Bittner, director of the Center for
Urban Transportation Research at the Uni-
versity of Southern Florida, said the demand
will probably be there by the time the
Nicaragua project is finished. Still, any new
waterway would have to compete with the
Panama Canal and the "land bridge" of rail-
way networks that connect U.S. West Coast
ports with the East Coast.
"I don t anticipate there being any reduced
demand in trade between the global trading
partners, so East Asia and the eastern United
States will continue to have significant trade,"
Bittner said. "If you make this large public
sector investment, it will be used, as long
as it s priced properly, as long as the Panama
Canal isn t significantly undercutting it."
Finding enough customers may turn out
to be the least of the Chinese company s
worries in a country that doesn t even have
a paved road connecting its Pacific and
For example, much of Nicaragua s water
is earmarked for human use, and its lush
rivers are too environmentally sensitive to
be simply dredged into waterways or
dammed to provide water to operate locks.
Panama faced few such restrictions in the
early 1900s when its canal was built.
Continued on Page 25
Nicaragua canal fast-tracked
with Chinese boost
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