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Nicaragua’s Rival to Panama Canal Set to Start Dec. 22

Submitted by Helmsman on Sun, 12/21/2014 - 08:30


Nicaragua’s Rival to Panama Canal Set to Start Dec. 22
Michael McDonald Dec 20, 2014 http://www.bloomberg.com/news/2014-12-19/nicaragua-s-rival-to-panama-can...

Nicaragua plans to begin building access roads and highways on Monday near the country’s Pacific coast as it starts work on a $50 billion inter-oceanic canal meant to rival Panama’s century-old waterway.

President Daniel Ortega and executives from the Hong Kong-based HKND Group, which is building the canal, will attend an inauguration ceremony in the capital of Managua, according to Telemaco Talavera, a spokesman for the project’s development commission. A separate ceremony will be held in Rivas, a town between the Pacific coast and Lake Nicaragua, he said.

At an estimated cost more than four times the size of Nicaragua’s $11 billion economy, the project has raised doubts among analysts who point to HKND’s lack of experience in major infrastructure projects and question the need for another Central American canal. Panama is planning to complete a $5.25 billion expansion of its waterway next year.

“I think there is some skepticism about it getting built and getting built on time and on budget,” said Lee Klaskow, a marine shipping analyst with Bloomberg Intelligence. “There are a bunch of active volcanoes in and around the area.”

Nicaragua’s canal would also require higher locks than Panama’s since it is 20 feet more above sea level, he said.

If built, the 278-kilometer (173-mile) shipping channel would connect Punta Gorda on the country’s Caribbean coast with the Pacific’s Brito port. It could be finished by 2019, according to HKND.

Opposition leaders have said the contract to HKND violates sovereignty, while residents along the proposed route have said their property isn’t being fairly valued for expropriation.

On Dec. 10 thousands of Nicaraguans marched to protest the project, carrying signs that read “Nicaragua is worth more than a canal” and “Get out Chinese.”

“It’s an enormous project, almost never done before in history,” Manuel Coronel Kautz, the head of Nicaragua’s canal authority, in a phone interview. “There is no doubt there is skepticism and there will continue to be skepticism. There is concern, but there is also determination.”