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article imageOp-Ed: Nicaragua Canal a boon to China but what about Nicaragua?

By Karen Graham     Aug 10, 2014 in Environment
Nicaraguan President Daniel Ortega has joined up with Chinese billionaire Wang Jing in literally slicing Nicaragua in half in the construction of a rival to the Panama Canal. The $49 billion project is expected to break ground in December of this year.
The concession for the canal was signed last June, giving the HK Nicaragua Canal Development Investment Company (operating as HKND Group) of Hong Kong a 50-year lease, renewable for another 50 years with the Nicaraguan government, furthering China's attempt to get a toehold in Central America.
Alberto Vega, with the ERM, the company doing feasibility studies on the project, says if the canal becomes a reality, it will meet global demand for commercial transport. "The new canal will provide a service for the ships with a deeper keel and the route will be shorter between Asia and modern ports on the east coast of the United States and Europe," he said.
Entrepreneur Wang Jing tells Reuters why he s putting his fortune behind a controversial $50 billion...
Entrepreneur Wang Jing tells Reuters why he's putting his fortune behind a controversial $50 billion dollar venture to build a canal across Nicaragua that aims to rival Panama's as a shipping lane.
Reuters Digital
Vega went on to explain that with world trade expected to increase by three times the present amount, shipping capacity through the Panama Canal will become more congested. He also notes that the increased sizes of vessels will end up exceeding the variances allowable in the existing canal.
Dong Yunsong, representative of HKND Group, also agrees with Vega's assessment. During a final presentation on the canal route, given this past Monday, He said a canal through Nicaragua would take only 5.0 percent of the world transportation trade, but would be economically beneficial to the country, doubling Nicaragua's Gross Domestic Product (GDP), benefiting the infrastructure and making it the richest country in Central America.
Total construction costs for the canal are estimated to be $49 billion, or about five times Nicaragua's GDP. Ortega thinks the project is one of the best chances to reduce poverty in his country because of the hundreds of jobs it will provide, but he may have sold his soul to the devil, or at least left his country open to environmental disaster.
Proposed routes for Nicaragua Canal.
Proposed routes for Nicaragua Canal.
Igeo News
Which route to take?
There has been considerable discussion on which route the first course of the canal would take. Six different routes have been proposed, all beginning at or near Bluefields on the Caribbean Sea to Morrito, a small town on the eastern shore of Lake Nicaragua. After crossing the lake, ships would reach the town of La Virgen. From here, ships would enter a man-made canal and navigate 18-24 kilometers across the isthmus of Rivas to reach Brito, a port on the Pacific Ocean. In all, the canal would be almost 133 miles long, compared to the 48 mile long Panama Canal.
The Chinese billionaire has also promised to two deep-water ports, a Free-trade zone, a resort, an international airport and several connecting roads. At Xinwei headquarters in Beijing, Wang said, "The canal would allow for passage of ships with a displacement of 400,000 tons. About 10 percent of global maritime transport will eventually pass through the canal. International trade will become greatly activated." He also said funds for the project would come from around the world, but didn't elaborate.
Wang has made it a point to assuage concerns about his ties with the Chinese Communist Party, although five of the seven members of the Central Politburo Standing Committee, including General Secretary Xi Jinping and Premier Li Keqiang, have visited with Wang and observed how he runs his company. Wang has no experience in huge projects of this undertaking, but insists he will be using expertise from China and the West.
The possible downside to the undertaking
Nicaragua is the largest and the poorest of Central America's countries. It also has the two largest lakes in Central America, Lake Managua and Lake Nicaragua. This being said, it is also unique for its biodiversity. Because of its biological diversity, tropical climate and active volcanoes, Nicaragua has experienced a booming tourism trade.
Environmental groups point out that Lake Nicaragua is also the country's largest source of fresh drinking water and is also the home to some of the world's rarest freshwater sharks, the Nicaraguan Shark. Earthquakes are another concern, because the Pacific zone of Nicaragua is prone to tremors as well as powerful earthquakes.
North of the canal routes is the Bosawas Biosphere Reserve, designated a UNESCO reserve in 1997. Covering 15 percent of the country, it is the second largest rainforest in the Western Hemisphere, next to the Amazon rainforest. Very little of it has been explored and it is rich in biodiversity.
The biodiversity of Nicaraguan rainforests is amazing and fragile.
The biodiversity of Nicaraguan rainforests is amazing and fragile.
Robbielab
South of the canal routes is the Indio Maiz Biological Reserve, in the southeastern corner of the country, bordering the San Juan River. This reserve was established in the 1990s and is known as the "gem of Central American reserves" to UCLA biologists. This one small reserve, only 4,500 sq. kilometers in size, holds a higher number of bird, tree and insect species than all of Europe.
Nicaragua has not solicited its own environmental studies for the canal project and is relying on HKND to take care of the matter. The company has no obligation to reveal what, if any results to the Nicaraguan public, just as they don't have an obligation to reveal results of feasibility studies. But with China backing the whole project and Nicaragua only providing the country, this project could end up being an environmental disaster, much like the Three Gorges Dam in China.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
More about Nicaragua, Panama canal, Hong Kong, environmental studies, Drinking water
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