Tags: nicaragua | canal | start | panama

Nicaragua Canal's Start Signals Future Problem for Panama

Image: Nicaragua Canal's Start Signals Future Problem for Panama
HK Nicaragua Canal Development Investment Co Ltd Chairman Wang Jing greets youths during the start of the first works of the Interoceanic Grand Canal in Brito town December 22, 2014, in this handout provided by the Presidential Palace Nicaragua. (Jairo Cajina/Presidential Palace Nicaragua/Reuters/Landov)  

By    |   Tuesday, 23 Dec 2014 08:22 AM

Ground was broken Monday on Nicaragua's shipping canal, a Chinese-led $50 billion infrastructure project to rival Panama's waterway and revitalize the country's economy.

Reuters reported Nicaragua's government as saying the proposed 172-mile canal, due to be operational by around 2020, would raise annual growth to over 10 percent and help put an end to endemic poverty in the country of 6 million people.

It could also give China a major foothold in Central America, a region that for years has been dominated by the United States, which completed the Panama Canal a century ago.

Construction of the new waterway will be run by Hong Kong-based HK Nicaragua Canal Development Investment Co Ltd (HKND Group), which is controlled by Wang Jing, a little-known Chinese telecom mogul well-connected to China's political elite.

"This moment will surely go down in history. I announce the start of work on the great canal of Nicaragua," Wang Jing said at an opening event on Nicaragua's Pacific coast, attended by the country's Vice President Omar Halleslevens.

More than a year since it was first announced, the project faces widespread skepticism, with questions still open about who will provide financing, how seriously it will affect Lake Nicaragua and how much land will be expropriated for it.

"Shipping would love for this to happen, but it's a luxury not a necessity," said Greg Miller at consultancy IHS Maritime. "Given how much this will cost, it's hard to take a stance on whether it will happen or not until there is a signal whether that money is not available or not."

Nicaraguan officials say they want the canal to receive international funding and reject the idea that China's government will bankroll the project, which is worth roughly four times the gross domestic product (GDP) of Nicaragua.

"This is not the Chinese turnkey project where they bring in all of the workers, every last nail, and every last noodle, and only buy a little diesel to get the machines they bring in running," presidential spokesman Paul Oquist said recently.

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Ground was broken Monday on Nicaragua's shipping canal, a Chinese-led $50 billion infrastructure project to rival Panama's waterway and revitalize the country's economy.
nicaragua, canal, start, panama
351
2014-22-23
Tuesday, 23 Dec 2014 08:22 AM
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