Nicaragua approves rival to Panama Canal, work begins

MANAGUA, Nicaragua - The Associated Press

This file photo shows workers positioning a ladder to hang a banner on a wharf surrounded by Lake Nicaragua, in Granada, Nicaragua. AP photo

In a matter of weeks, a little-known Chinese tycoon has hired some of the world’s top experts in mammoth infrastructure projects and pushed through Nicaragua’s congress a bill granting him the exclusive right to develop a multibillion-dollar rival to the Panama Canal.

Now, the real work begins.

June 13’s vote may have given Wang Jing the concession to build a canal across this Central American nation, but his HK Nicaragua Canal Development Investment Co. still has to study whether the idea is truly economically viable.

Spokesmen hired by the company say they believe that rising world trade means it is highly likely that a new canal could be profitable. Yet they acknowledge that what will be a months-long feasibility study could prove just the opposite.

The project has generated deep skepticism among independent shipping experts. At the same time, environmentalists are worried about the impact on Lake Nicaragua, the country’s primary source of fresh water.

The legislation approved by a 61-25 vote in the National Assembly dominated by President Daniel Ortega’s Sandinista Front contains no specific route for the canal and virtually no details of its financing or economic viability. It simply grants the Hong Kong-based company 50 years of exclusive rights to study the plan and build and operate a canal in exchange for Nicaragua receiving a minority share of any profits.

Ortega’s backers say the Chinese will transform one of the region’s poorest countries by turning a centuries-old dream of a Nicaraguan canal linking the Pacific and Caribbean into reality. They say it will create tens of thousands of jobs for the country and fuel an economic boom that would mimic the prosperity of nearby Panama and its U.S.-built canal.