In April 2017, three years after this road was created to mark the official start of the construction of the Great Nicaraguan Interoceanic Canal in Brito, on the country’s Pacific ocean western coast, it remains unpaved, and is only used by horses from nearby farms. Credit: José Adán Silva/ IPS

By José Adán Silva
PUNTA GORDA/BRITO, Nicaragua, Apr 25 2017 (IPS)

Less than three years from the projected completion in Nicaragua of a canal running from the Caribbean Sea to the Pacific Ocean, there is no trace of progress on the mega-project.

IPS traveled to both ends of the routet: Bluefields, on the Caribbean coast in eastern Nicaragua, 383 km from Managua, and Brito, on the Pacific coast in the southern department of Rivas, 112 km from the capital.

In the South Caribbean Coast Autonomous Region, IPS traveled by boat from Bluefields, the regional capital, to the town of Punta Gorda to the south.“About two years ago, foreigners used to come and travel around by helicopter and boat from the mouth of the Punta Gorda River all the way upstream. They were escorted by the army and would not talk with anyone, but they have not returned." -- Anonymous indigenous leader

There are 365 small scattered indigenous settlements along the banks of the rivers, in a region divided into two sectors: the Southern Triangle, facing the sea, and the Daniel Guido Development Pole, along the banks of the Punta Gorda River – the Caribbean extreme of the projected canal.

According to the plans of the Hong Kong Nicaragua Canal Development (HKND) group, in charge of the project to build the Great Nicaraguan Interoceanic Canal, in this sparsely populated jungle area bordering the territory of the Rama indigenous people, a deep-water harbour must be built, as well as the first locks on the Caribbean end for the ships that cross to or from the Atlantic Ocean.

The entire Great Canal project, according to HKND, is to include six sub-projects: the canal, the locks, two harbours, a free trade zone, tourist centres, an international airport, and several roads.

Other connected works are a hydroelectric power plant, a cement factory, and other related industrial facilities to ensure the supply of materials and the successful completion of the canal in five years, counting from 2014, when the project officially got underway.

But in Punta Gorda there are no infrastructure works, no HKND offices, and among the local population nobody is willing to openly talk about the subject.

“The silence is a matter of caution, people think you might be a government agent,” a local indigenous leader of the Rama and Kriol Territorial Government (GTR-K), an autonomous organisation of indigenous communities that own the lands that will be affected by the canal, told IPS on condition of anonymity.

In the days prior to IPS’ visit to the region, army troops and the police carried out operations against drug trafficking, and there was an overall sense of apprehension.

The members of the GTR-K are divided between supporting and opposing the project, but negotiations with the government representatives have been tense and conflict-ridden, to the extent that complaints by the local indigenous people demanding respect for their ancestral lands have reached the Washington-based Inter-American Commission on Human Rights.

“About two years ago, foreigners used to come and travel around by helicopter and boat from the mouth of the Punta Gorda River all the way upstream. They were escorted by the army and would not talk with anyone, but they have not returned,” said the indigenous leader of this remote territory that can only be accessed by boat or helicopter.

Silence on the subject is not just found among the locals. There is no talk anymore at a government level about what was once a highly touted project.

Fishermen and stevedores on one of the docks on the Punta Gorda River, near where it runs into the Caribbean Sea, the projected Caribbean extreme of the interoceanic canal, where local residents have not seen any visible sign of progress on the works officially launched more than two years ago. Credit: José Adán Silva/ IPS

However, Vice President Rosario Murillo, the chief spokesperson of the government of her husband Daniel Ortega, president of Nicaragua since 2007, announced this month that with Taiwan’s support, a deep-water harbour, not connected to the plan for the canal, would be built in the same area with an investment that has not yet been revealed.

María Luisa Acosta, coordinator of the Legal Aid Centre for Indigenous Peoples, told IPS that the Special Law for the Development of Infrastructure and Transportation in Nicaragua Relating to the Canal, Free-Trade Areas and Associated Infrastructure, known as Law 840, was passed in June 2013 without consulting local indigenous and black communities.

A year later, on July 7, 2014, HKND and the Nicaraguan government announced the route that had been chosen for the canal, running from the Rivas Isthmus across Lake Cocibolca, also known as Lake Nicaragua, to Punta Gorda.

The route would negatively affect the indigenous communities of Salinas de Nahualapa, Nancimí, Veracruz del Zapotal, Urbaite de las Pilas and San Jorge Nicaraocalí, along the Pacific, while in the Caribbean region it would impact the Creole communities of Monkey Point and Punta Gorda, as well as the Rama people of Wiring Kay, Punta de Águila and Bangkukuk Tai, home to the last speakers of the Rama language.

According to leaders of different indigenous communities, government representatives began to pressure them to give their consent over their lands to allow the canal to be built, giving rise to a still lingering conflict.

The canal is to be 278 km in length – including a 105-km stretch across Lake Cocibolca – 520 metres wide and up to 30 metres deep.

It was to be built by the end of 2019, at a cost of over 50 billion dollars – more than four times the GDP of this Central American country of 6.2 million people, 40 per cent of whom live in poverty.

The construction of a harbour, the western locks and a tourist complex is projected in Brito, a town on the Pacific coast in the municipality of Tola.

The town is named after the Brito River, a natural tributary of Lake Cocibolca, which winds through the isthmus until flowing into the Pacific Ocean. The works were officially inaugurated in Brito in December 2014.

The president of HKND, Wang Jing, together with Nicaraguan government officials, appeared in the media next to the construction equipment to inaugurate the work on a 13-km highway, which would be used to bring in the heavy machinery to build the initial infrastructure.

It was the last time Wang was seen in public in Nicaragua.

There is no new paved highway, just a dirt road which in winter is difficult to travel because it turns into a muddy track.

No heavy machinery is in sight, or vehicular traffic, workers or engineering staff.

Here, as in Punta Gorda, people avoid talking about the canal, and if they do it is on condition of anonymity and in a low voice.

“In Rivas we drove out the Chinese with stones when they tried to come to measure the houses, and after that, the police harassed us. They disguised themselves as civilians – as doctors, vendors and even priests, to see if we were participating in the protests,” said one local resident in Brito, who was referring to the 87 protest demonstrations held against the canal in Nicaragua.

In Managua, Telémaco Talavera, the spokesman for the state Commission of the Great Nicaraguan Interoceanic Canal, said briefly to a small group of journalists, including IPS, that studies on the canal continue and that “the project is moving ahead as planned.”

However, Vice President Murillo announced in January that a 138-km coastal highway would be built along the Rivas Isthmus, to cater to the tourism industry and improve transportation, at a cost of 120 million dollars – with no mention of the canal.

One month later, government machinery was moved to Rivas to begin building the road where the canal was supposed to go.

One of the projected routes for Nicaragua’s interoceanic canal. Credit: National Assembly

By José Adán Silva
MANAGUA, Jun 13 2013 (IPS)

A five-century wait could come to an end when the Nicaraguan government grants a concession this year to a Chinese company to build a canal between the Pacific and Atlantic oceans, despite local protests and international scepticism.

On Thursday, the single-chamber legislature gave fast-track approval to a controversial law that paves the way for the start next year of construction of a rival to the Panama Canal. The 100-year concession will go to the Hong Kong-based Chinese company HK Nicaragua Canal Development Investment Co. Ltd. (HKND Group).

The company was selected by the government of leftwing President Daniel Ortega to build the massive canal at an estimated cost of over 40 billion dollars.

But many voices in Nicaragua have called for greater transparency in the bidding process for the construction project that will bring to life a dream that has been cherished in this Central American country since the Spanish conquistadors first arrived.

One of the main criticisms is that the state of Nicaragua would grant complete rights over the canal for 50 years, with an option for another 50 years, to a company that was set up in October 2012 and established a holding company in the Cayman Islands that same year.

The Chinese company’s director, Wang Jing, is chairman of the Beijing-based Xinwei Telecom Enterprise Group, which was awarded a 300 million dollar telecommunications contract in Nicaragua in 2012. But Xinwei is at least four months behind in the investment pledged under the contract.

Construction of the canal is slated to begin in May 2014, and is expected to take 10 years. The feasibility studies are not yet ready, but according to the Sandinista National Liberation Front (FSLN) government, a London-based firm has been commissioned to carry them out.

The first legal step was taken in July 2012, when at Ortega’s initiative parliament passed the “law for the construction of the interoceanic canal” by a mixed public-private company.

The state would hold a 51 percent stake, and the remaining 49 percent would be in the hands of investors, which could be countries, international bodies, individuals or companies.

HKND plans to build the canal across 190 km of land, while 80 km of the route would go across Cocibolca lake. The canal will be 150 metres wide and will serve larger ships than the Panama Canal.

The project has the firm support of the Ortega administration, which sent the bill – the “special law for the development of Nicaraguan infrastructure and transportation involving the canal, free trade zones and associated infrastructure” – to the legislature on Jun. 5 for fast-track treatment.

The bill approved Thursday modifies the original “law for the construction of the interoceanic canal”, modifies the projected route, and grants the concession exclusively to the Chinese investors.

It also establishes that Nicaragua gives up any claim to or sovereignty over the concession for up to 100 years.

The text was approved by 61 votes in favour, 25 against, and one abstention, after a heated three-hour debate. But the opposition lawmakers withdrew immediately during the separate votes for each one of the law’s 25 articles, to protest what they considered insufficient debate on the bill.

The construction project approved by the new law includes the canal, two deep-water ports, an international airport, a “dry canal” freight railroad, a series of free-trade zones, and an oil pipeline.

Initial estimates indicate that the canal will have the capacity to handle 450 to 500 million metric tonnes of freight a year and ships of up to 250,000 tons that are 400 metres long, 59 metres wide, and with a berth-side depth of 22 metres.

By comparison, the Panama Canal can currently handle vessels 260 metres long, 32 metres wide, with a beam of 19 metres – a size known as Panamax. But the expansion project now underway will double the capacity of the Panama Canal by 2015.

The new law grants 100 percent of the shares to the Chinese investors and establishes that the transfer to Nicaragua will be gradual, starting 10 years after the canal begins to operate. Nicaragua will receive 10 million dollars a year until all of the shares have been handed over a century later.

The business chamber and investors in Nicaragua support the government’s plan, albeit with some reservations. But it is staunchly opposed by the rightwing opposition and Sandinista dissidents, as well as environmentalists.

Eduardo Montealegre, head of the opposition legislators, told IPS that Ortega and his officials were “selling out the country” with the broad concessions granted to foreign investors that, he said, hurt Nicaragua’s current and future interests.

Constitutional lawyer Gabriel Álvarez told IPS that the concession of the project to Chinese investors violated the constitutional article on national sovereignty, and left the country vulnerable to local or international legal action.

Biologist Salvador Montenegro, director of the Research Centre for Aquatic Resources of the National Autonomous University of Nicaragua, told IPS that any construction project involving Cocibolca lake endangered biodiversity, and Central American society as a whole.

The 8,624-km long lake in southwest Nicaragua is the region’s largest freshwater reserve.

The government’s secretary of public policies, Paul Oquist, dismissed the demands by environmentalists and politicians and anticipated that after construction of the canal started, GDP would grow 10.8 percent in 2014 and 15 percent in 2015, compared to the current four to five percent.

The government projects that GDP will climb from 10 billion dollars today to 24.7 billion dollars in 2018. But without the construction of the canal, GDP would stand at 14.9 billion dollars in 2018.

Ortega informally discussed the idea of the canal with U.S. President Barack Obama at the May 4 summit of presidents of the Central American Integration System in Costa Rica.

The initiative has not drawn official reactions, either positive or negative, from Nicaragua’s Central American neighbours.

Only Panamanian President Ricardo Martinelli congratulated Nicaragua for the plan and offered it technical assistance.