Nicaragua suspends Interoceanic Canal construction concession to Chinese company
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The National Assembly of Nicaragua repealed last Wednesday, May 8, a law that regulated the planning, construction and management of an inter-oceanic waterway, which would compete with the Panama Canal and which had been granted to the Chinese group Hong Kong Nicaragua Canal Development Investment Co. Limited (HKND Group), owned by Chinese businessman Wang Jing.
Law 840 of 2013 had granted HKND Group the management planning of this canal for 50 years extendable in exchange for a payment of US$10 million each year during the first decade, as well as a right to 1% of the subproject equity that would rise to 99% at the end of the concession; however, the works did not progress as expected after the act of commencement of construction in December 2014.
For this reason, President Daniel Ortega presented the reform to the Law of the Legal Regime of the Grand Interoceanic Canal of Nicaragua and Creation of the Authority of the Grand Interoceanic Canal of Nicaragua, which was unanimously approved by the Assembly.
The project foresees a 278 kilometers long canal, with entrances in the Brito River, on the Pacific coast and near the mouth of the Punta Gorda River, in the Caribbean, according to W Radio. The Panama Canal, for example, is only 80 km long.
This construction is valued at US$50 billion, which has generated doubts about its feasibility, as well as about the environmental damage it could cause to the largest lake in Central America, Lake Nicaragua.
From now on, the Grand Canal Company, in charge of continuing with the works, will be presided over by government officials, who will form the Directorate of the Authority of the Grand Interoceanic Canal of Nicaragua.
So far, according to the newspaper La Prensa Gráfica, the presidency will be headed by a delegate of the Minister of Transportation and Infrastructure, and the vice presidency by a delegate of the President of the Republic for the Caribbean Coast.
Likewise, the Secretariat will be exercised by the advisor for Investments, Trade and International Cooperation of the Presidency of Nicaragua, Laureano Ortega Murillo, son of Ortega and Vice President Rosario Murillo.
The amendment was presented after the newspaper La Prensa published a report on Chinese businessman Wang Jing, who was presented as a disgraced swindler, based on Chinese media reports. At the time, this investor was presented as one of the richest men in China and among the 200 richest in the world.
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