Nicaragua cancels controversial Chinese canal concession after nearly a decade

After nearly a decade, Nicaragua’s congress finally cancelled a controversial canal concession granted to Chinese businessman Wang Jing that critics said endangered the environment and threatened to displace rural communities.

Despite a symbolic “groundbreaking” in 2014, no work was done on the canal that was to link Nicaragua’s Atlantic and Pacific coasts.

At one point, crews broke ground on access roads near the canal but digging the waterway never started.

Thousands of Nicaraguan farmers had protested against land seizures meant to create a route for the government-backed project.

Nicaragua’s canal had been pitched as a competitor to the nearby Panama Canal (pictured). Photo: AP

In 2019, a Nicaraguan judge sentenced three farmers’ leaders who participated in the protests to prison for 216 years, 210 years and 159 years. They were accused of promoting a “failed coup” against the government. Nicaraguan law caps prison time actually served at 30 years.

The proposed US$50 billion, 278km (172-mile) canal across this Central American nation was long viewed as a joke that later turned deadly serious.

The canal and its potential effect on the environment became a symbol of the odd and arbitrary nature of President Daniel Ortega’s increasingly repressive regime.

Ortega’s government claimed the canal would create tens of thousands of jobs and stimulate the poor Central American nation’s economy.

Nicaragua’s canal had been pitched as a competitor to the nearby Panama Canal, which itself has seen crossings limited in recent months due to drought that lowered water levels on the 80km waterway.

Detractors argued the Nicaragua project posed serious environmental risks, would displace thousands of families in the countryside and was financially unfeasible.

“It’s a shame that Ortega realises his own failure a decade later, after making arrangements to confiscate land from peasant farmers,” said Medardo Mairena, the leader of a canal opposition group, who is in exile in the United States.

The canal concession was granted to the Hong Kong-based company HK Nicaragua Canal Development Investment Co. Limited, owned by Wang.

The law, passed in 2012 with the Ortega government’s backing, would have given the Chinese investor a concession of up to 100 years to build and operate the canal.

While stripping the concession from the Chinese investor, the repeal leaves in place a law calling for the canal to be built, although it’s unclear who would finance such a project.

Additional reporting by Reuters



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