The Nicaragua canal project looks set to move forward following government approval of the environmental and social impact assessments. The project, which would bisect Nicaragua, is being undertaken by the Chinese HKND Group, which won the project in June 2013. In spite of this apparent progress, questions around the project’s feasibility remain, especially with the reported departure of US consultancy firm McKinsey & Co. McKinsey lent financial credibility to the project, which requires some US$40 – 50 billion in funding in order to proceed. Though HKND say the economic feasibility study has been concluded, it is not publicly available. There are questions over where this funding will come from, given that the initial intent was for it to be a Chinese project and in recent times China’s economy has slumped. The billionaire owner of HKND, telecom executive Wang Jing, has reportedly lost more than 80% of his wealth this year alone. Meanwhile, some have suggested that the price tag is a gross underestimate, with estimates going as high as US$100 billion.
Apart from question marks over its funding, the Nicaragua canal project is controversial because it will require the relocation of villages along the canal’s path and also crosses many of the nation’s protected areas, including Lake Nicaragua, which is a major source of drinking water relied upon by hundreds of thousands of people. The environmental review has been criticised for being vague and having insufficient data to support its conclusions. It has not been independently reviewed in its entirety, though four chapters have been reviewed by Florida International University. Despite these concerns, the approval of the environmental and social impact assessments means that the project is cleared for structural design work to begin. Construction of the 276 km canal will reportedly take five years.
Further controversy relates to the secretive nature of the project, which has largely gone through without public consultation or parliamentary debate, with no clear idea of what the costs relate to, and with no open tenders. HKND has received extraordinary leeway from the government in order to basically do what is necessary for the project to succeed. This has been seen by some as a result of government ‘desperation’. Nicaragua is the second poorest country in the Western Hemisphere.
Edited from various sources by Katherine Guenioui
Read the article online at: https://www.worldcement.com/the-americas/17112015/environmental-impact-assessment-approved-for-nicaragua-canal-project-9/