China puts Nicaraguan Canal plan on hold
Stephen Gibbs, Lucinda Elliott, Caracas
June 19 2017, 12:01am, The Times
The new canal’s proposed route would end at the Brito inlet to the Pacific
BRITTANY PETERSON/TNS VIA GETTY IMAGES
It was billed as the biggest earth-moving operation in history: the creation of a 170-mile canal across Nicaragua, linking the Caribbean Sea and the Pacific Ocean.
The Grand Interoceanic Canal (commonly known as the Nicaraguan Canal) would have been more than twice the length of the Panama Canal, and wide enough for the new generation of 400,000 tonne container ships.
Now, it appears that the £40 billion project is on hold amid rumors that it has been shelved because of China’s improved relations with Panama.
Construction had been due to start this year, but residents along the planned route have reported no signs of any activity. ProNicaragua, the Nicaraguan government’s investment agency, made no mention of the project in its 2017-2021 plan, and President Daniel Ortega, once an enthusiastic proponent of the scheme, has made no statement on it for months.
The proposed canal construction was approved by the Nicaraguan assembly in June 2013. A company owned by Wang Jing, a Chinese telecoms tycoon, was given an extendable 50-year concession to finance and manage the project. The government in Managua said that the canal would transform the economy and provide an efficient link between China and the Americas.
“Since the project was approved, not a single part has been built,” said Carlos Fernando Chamorro, editor of Confidencial. “Not a single piece of land has been expropriated on the canal route.”
One possible reason for the plan being abandoned is that Mr. Wang is understood to have lost a fortune in the June 2015 Chinese stock market crash. Another is that he is acting on behalf of the Chinese government — although he has denied this.
Earlier this month, China and Panama announced new diplomatic relations and that Panama would sever all ties with Taiwan. Supporting a rival to the Panama canal would seem counter-productive. China is its second biggest customer after the United States.
Environmentalists will be relieved. The new canal’s proposed route was through Lake Nicaragua, the biggest freshwater reserve in Central America. It was feared an artificial link between the lake and the sea would pollute water and fisheries for millions.