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31922Did Nicaragua get the short end to Chinese Imperialism

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  • Cort Greene
    Dec 16, 2013

      SUNDAY, DECEMBER 15, 2013

      Daniel Ortega: I'd be happy to throw in my first-born child as well

      Look I hope that the proposed canal through Nicaragua works out well for the Nicaraguan people - minimal environmental damage, good jobs, increased revenue, and all that other stuff. I have my doubts but I hope that if they do go forward with the project it will succeed.

      And I understand that the Nicaraguan government needs to offer some incentives to investors in order to go forward with the project but have you taken a look at what the government is offering?
      After three days of discussion in June, the National Assembly controlled by Ortega’s Sandinista party approved giving Beijing-based telecommunications CEO Wang Jing a 50-year renewable concession to build a canal more than three times the length of the Panama Canal, as well as tax-free side projects including ports on Nicaragua’s Pacific and Atlantic coasts, an oil pipeline bisecting the country, a cargo railway, two free-trade zones and an international airport.
      The deal pays Nicaragua $10 million a year for 10 years and gradually transfers ownership to Nicaragua, handing over 100 percent after a century. But the payments and the transfer only begin if and when the canal begins operation. Under the agreement, Wang can skip building the canal altogether but plow ahead with the other projects.
      The legislation allows Wang to petition the state to confiscate any land needed. It requires him to pay owners the assessed value, but much of the property outside major cities has never been officially assessed, risking what private businesses fear could be a land grab for pennies on the dollar.
      Nicaragua is required to compensate Wang for legal changes that delay the canal or cause it to lose money. Compensation can come from state coffers, including the reserves of the central bank, under a waiver of Nicaragua’s sovereign immunity.
      On the one hand, I imagine that these tasty concessions are the sort that US investors receive moving into new countries that are desperate for foreign direct investment. On the other hand, could you imagine the outrage in this case if the investor were US-based?


      Chinese Workers Arrive In Nicaragua To Do Viability Studies For Controversial Canal

      on December 12 2013 4:14 PM
      Nicaragua canal plans
      The planned Nicaragua canal could follow one of six proposed routes. Gobierno de Nicaragua

      The tiny town of Brito, on the Pacific coast of Nicaragua, has expanded its population in the last few weeks. Chinese workers have been arriving, slowly but steadily, ever since President Daniel Ortega’s government announced the construction of a Nicaragua Canal, with funding and equipment from Chinese company HK Nicaragua Canal Development Investment Co. Ltd. The project, which aspires to be a competitor to thePanama Canal, is one of the jewels of Ortega’s administration and, should it be realized, would bring one of Nicaragua’s longtime dreams to life

      The Chinese workers have been joined by young biologists from the Universidad Nacional Autónoma de Nicaragua (National University of Nicaragua, or UNAN) and a British environmental consultancy hired to evaluate the potential impact the future construction site will have on the environment. Their studies are conducted with utmost secrecy, as none of the plans for the Canal -- including its planned route -- will be made public until late December. Wang Jing, chairman of HKND -- a unit of HK Nicaragua Canal Development Investment Co. and the man behind the entire project -- will hold a press conference in Hong Kong to announce the final version of the project and pitch the plan to potential investors.t

      The cost of the project is estimated at $40 billion, but analysts believe it will go much higher. “Experience teaches us that the real cost would be at least 20 percent higher,” said Jean-Paul Rodrigue, a transportation expert at Hofstra University in New York.

      The project has sparked controversy both inside and outside of Nicaragua. For many citizens, the thought of delegating this national dream to a foreign company is an affront to the country’s sovereignty, and has even been disputed in Congress: according to some experts, it is against the Constitution.

      “This project raises many questions,” said opposition Congressman Carlos Langrand. “Why did they seek out a Chinese partner, without an international request for bids? We do not see seriousness in this project.”What Ortega has done here is give his country to a foreign entrepreneur, only to become rich himself, without paying a cent to the Nicaraguan people,” said Dora María Téllez, a noted historian and a key figure in the Sandinista revolution that Ortega headed in 1979.

      And it does not look like the partnership with China is going smoothly either. In August, tensions arose as both parties gave contradictory reports on the state of the project: while Wang Jing was giving details to the British press on the route of the canal and its capacity, Ortega denied that any final drafts were going to be made before the viability reports had been filed.

      But all of these issues might even be beside the point: experts in transportation and engineering the world over are saying that the Canal is not feasible, and it will never happen.

      “It is borderline fantasy,” said Ed Sands, global logistics lead at consultancy firm Procurian. “There is simply no need, no demand for another canal in Central America. Panama has taken care of that.”

      “The cost is going to be too outstanding, and who is going to take care of that? China’s current banking crisis will end it,” he added.

      “Does anybody have $20 billion to spare?” agreed Rodrigue. “It is just going to be a colossal waste of resources.