Monday 2 October 2023

Is The Gran Canal de Nicaragua Dead In The Water?

Paying the bills


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30 September 2023 - At The Banks - Source: BCCR

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TODAY NICARAGUA – Not a single ship. Not a single piece of work. Six years after 61 legislators loyal Daniel Ortega approved in the National Assembly the law of construction of the interoceanic canal or the Gran Canal de Nicaragua (GCN), Law 840, there is absolutely no visible single piece work that augurs the beginning of “the world’s greatest engineering project.”

The Gran Canal de Nicaragua (GCN) project. A dream of the government of Daniel Ortega to “defeat the poverty inherited from the neoliberal past”

On June 13, 2019, expired the six years the Chinese businessman Wang Jing his company HKND had to show concrete evidence of the US$50 billion dollar financing for the construction of the canal that would run from the Pacific to the Caribbean, otherwise, the law may be repealed without prejudice to the Nicaraguan State.

It all started in 2012 when the son of the presidential couple, Laureano Ortega Murillo, returned from a tour of China announcing important investments for Nicaragua.

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On July 3, 2012, with the story that Nicaragua would advance on a definitive route to “defeat the poverty inherited from the neoliberal past”, the Ley del Régimen Jurídico del proyecto del Gran Canal (Law of the Legal Regime of the Grand Canal project) and the establishment of the Grand Canal Authority was approved to form the legal basis of the failed attempt.

On June 13, 2013, among speeches of wealth accounts, 61 legislators appointed by Ortega approved behind the people’s back the so-called “Ley Especial para el Desarrollo de Infraestructura y Transporte Nicaragüense Atingente al Canal, Zonas de Libre Comercio e Infraestructuras Asociadas” (Special Law for the Development of Nicaraguan Infrastructure and Transportation in the Canal, Free Trade Zones and Associated Infrastructures).

The power couple, Rosario Murillo (left), Nicaragua’s vice-president and wife of Daniel Ortega, celebrate victory for the canal project

The Nicaraguan interoceanic canal project, in short, was a private investment by Chinese entrepreneur Wang Jing, on behalf of his Hong Kong Nicaragua Canal Development (HKND-Group).

The project would cost US$50 billion dollars. It would be 278 kilometers wide, three times longer than the Panama Canal.

The Ortega government expected that country’s average growth would go from 4.5% of GDP to 10% in the first years of operation of the canal, plus the creation of some 50,000 jobs during the five years of construction and another 200,000 when the canal began to operate by the end of 2019 or early 2020.

The so-called Canal Commission (Comisión del Canal in Spanish) was made up of 16 public officials, among them Laureano Ortega; the leader of the Sandinista party, Edwin Castro; the general commissioner and de facto head of the police, Francisco Díaz; and the vice president of Albanisa, Francisco “Chico” López, among others.

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University careers were announced with a user profile for the canal, Mandarin Chinese would be taught in schools and work centers and housing complexes would be built to house the thousands of foreign workers.

The private company, an unconditional ally of the Ortega administration at that time, analyzed business possibilities and raised logistical concerns such as HKND was going to require, starting in 2015, 12.5 tons of meats, 37.5 tons of rice and 25 tons of vegetables per day to feed the first 50,000 workers.

On June 14, 2013, Ortega and Jing signed the Framework Agreement of Concession and related documents, which granted the Chinese businessman unlimited powers over Nicaraguan sovereignty for a period of 100 years.

in June 2013, Daniel Ortega (left) and Wang Jing celebrate the signing of the agreement for the canal project.

It was a 120-page document of the provisions of the Concession Framework Agreement and related documents, which contained, according to independent legal analyzes, violations of more than 40 articles of the Political Constitution.

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Wang Jing was given all the rights to use the land, air, water, maritime spaces and natural resources of the country.

The State would have only 1% of the shares once the Canal went into operations, and it would take half a century to get it to 50% of the shares.

At the same time, the State renounced its sovereign immunity and its resources in favor of HKND, by agreeing that the assets and accounts of the Nicaraguan State, including the reserves of the Central Bank of Nicaragua, could be intervened “in favor of the investor or the concessionaire”.

On July 7, 2014, HKND and the Nicaraguan government announced the definitive route of the Gran Canal, which would split in two the national territory, and began on the Isthmus of Rivas, crossing Lake Cocibolca, also known as the Great Lake of Nicaragua, arriving at Punta Gorda in the South Caribbean.

Model of the canal locks that would be built on the Pacific side of the project

The route was impaired by passage through the territories of the Salinas indigenous communities of Nahualapa, Nancimí, Veracruz del Zapotal, Urbaite de las Pilas and San Jorge Nicaraocalí, on the Pacific side, while in the Caribbean it affected the Kriol communities of Monkey Point and Punta Gorda, as well as the branches of Wiring Kay, Punta de Águila and Bangkukuk Tai, the settlement of the last speakers of the branch language.

Then, according to leaders of different communities, government representatives began to pressure the indigenous people to give their consent to their territories for the benefit of the canal, starting a conflict that is still alive.

The course of the channel would be 278 kilometers long, 520 meters wide and up to 30 meters deep.

The canal would cross 105 kilometers of Lake Cocibolca and should be ready, as announced in 2013 and ratified in 2014, at the end of 2019, at a cost of more than US$50 billion dollars, more than four times the gross domestic product (GDP) of the country of 6.2 million people, of which 40% live in poverty.

Lake Cocibolca, better known as Lake Nicaragua, would be dredged and modified for the canal project.

The port, the locks of the western sector and a tourist complex was planned for Brito, a Pacific coastal town in the municipality of Tola.

The community owes its name to the Brito River, a natural tributary of Lake Cocibolca that winds its way up the isthmus into the Pacific coast.

December 22, 2014, was the day the works “officially began”. The president of HKND, along with officials of the Nicaraguan government appeared before the government media, together with the construction equipment of local institutions to “inaugurate” the works of a 13-kilometer road that would be used to introduce the heavy machinery destined to build the first infrastructures.

On December 22, 2014, members of the Grand Canal Commission and the president of the HKND Group company, Wang Jing, inaugurated what they called the start of the mega project in Brito, department of Rivas. From, official government media website

It was the first time that the announced works became concrete and it would be the last time that Chinese businessman Wang Jing was seen in public.

Now, six years later, the announced road does not exist, there is only a dusty dirt road, which in winter is difficult to travel through the mud currents that form.

There is no heavy machinery, no vehicular traffic, no presence of workers. Not anyone.

In October 2015, the dream of the “promised land”, as Daniel Ortega said, referring to the canal, began to fade when it became known that Wang Jing had lost 85% of his fortune due to the fall of Xinwei shares.

On the dirt road that would supposedly carry heavy machinery to build a deepwater port in Brito, Rivas, there are only puddles and cows. Photo: R. Villareal / La Prensa

Bloomberg agency reported at that time that the entrepreneur’s capital went from US$10.2 billion dollars to US$1.1 billion.

According to plans, the canal route would affect 10 municipalities: Bluefields, Nueva Guinea, San Miguelito, San Carlos, Rivas, Tola, El Castillo, Altagracia, San Jorge, and San Juan del Sur.

To carry out the construction work, people talked about the expropriation of the land through which it would pass. It is estimated that some 27,000 Nicaraguans would have been relocated due to the megachannel.

And so began the campesino (peasant) struggle and resistance: The families settled on the route began to stone the Chinese delegations who arrived, escorted by police and army soldiers, to the communities to make measurements.

Also began the rural marches and repression. There were more than a hundred peasant marches throughout the country and most were repressed by the police in the service of the Ortega, while the siege and persecution of peasant leaders like Francisca Ramírez, Medardo Mairena and environmental activists such as Mónica López Baltodano and Octavio Ortega took place.

Chontales, Nicaragua. June 13, 2015. March against the canal in Juigalpa. Photo: Douglas Lopez / La Prensa

The project decision was never submitted to consultations or a referendum. Neither were economic and environmental feasibility studies of the project known. The interoceanic route was planned to cross Lake Nicaragua, the largest freshwater reserve in Central America.

On November 7, 2016, Wang Jing sent a letter congratulating Ortega on his second consecutive re-election and again promised to fulfill the dream of the canal, in a communication that the ruling party held discreetly, almost out of courtesy.

This is the second time that the campesinos (peasants) of the anti-canal movement arrive in Managua to protest. Photo: Oscar Navarette / La Presna

In December 2016, LA PRENSA sent a work team to the area where the canal would cross in Rivas to check on the progress of the project. The only thing that the team could see, where big ships would pass, were cows and horses on the road without anything interrupting the tranquility of the area.

The dirt road in Tola, Rivas, is the only work of the Interoceanic Canal that HKND made in all the years.

In April 2017, the few Chinese HKND technicians that remained in the country left their offices and left the country, while the subject of the canal came out of the official media.

On February 28, 2017, project spokesman, Telemaco Talavera, less euphoric than ever, told LA PRENSA that “the work was still ongoing” and that some “pending studies” were still needed for the project to move forward.

Chinese businessman Wang Jing, and the then president of the CNU, Telemaco Talavera, in a 2014 conference about the project that never started.

A few years ago, happy before the official media, Talavera detailed, detailed studies conducted by a British firm for HKND, that by 2020 some 3,500 ships would pass through the Nicaraguan canal and around 5,100 in 2050, mainly container ships of 25,000 metric tons, tankers and bulk carriers among others.

On May 28 of this 2019, Mónica López, ex-adviser of the Campesino movement and environmental lawyer, alerted La PRENSA that in the Framework Agreement of Implementation and Implementation (MCA), Ortega had given Wang Jing six years to obtain financing to develop the project, and if it did not do so within that period, the Government of Nicaragua was obliged to withdraw the concession.

Managua, Nicaragua, December 23, 2014. Wang Jing, president of the HKND company that was to build the interoceanic canal in Nicaragua during a press conference. Photo: Oscar Navarrete / La Prensa

Lopez indicated that this clause established “72 months as of June 14, 2013”, when the framework agreement was signed, that the concession of said megaproject may be terminated because is the concessionaire, HKND, did not obtain the investment to develop the Gran Canal.

Clause 15.21 states that if the firm financing for the project has not occurred within 72 months from the effective date of the Framework Agreement, “then, the Government or the corresponding Sponsor will have the right to terminate the concession for that project and all of its rights, benefits, and obligations under this Agreement.”

June 14, 2019. As of this date, the Ortega administration will have ninety days to notify of the cancellation of the concession

September 12, 2019, is the date the Gran Canal project concession expires and notification to HKND of the derogation of the law.

Read the original article in Spanish by La Prensa.

Article originally appeared on Today Nicaragua and is republished here with permission.

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Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

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