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Nicaragua canal construction 'will not begin until 2015'

News from Nicaragua | Monday, 13 January 2014 | Click here for original article

According to the head of the canal authority, Manuel Coronel Kautz, the delay is to allow more time for feasibility studies to be completed. A concession was granted in June of 2013 to the HKND Group of Chinese businessman Wang Jing to build a canal, a railroad, an oil pipeline, two deep water ports and free trade zones at a cost of US$40 billion. An economic feasibility study is being carried out by McKinsey and Company, the environmental impact study by British Company Environmental Resource Management (ERM), and the technical study by the China Railway Construction Company (CRCC).

In December the Supreme Court rejected 32 suits against the concession filed by environmentalists over possible damage to Lake Cocibolca (Nicaragua), by human rights organizations on the issue of indigenous rights, and by businesspeople concerned about the procedure for compensating landowners. The government has calculated that when the construction of the canal begins, Nicaragua’s economic growth will accelerate from 5% per year to over 10% and as much as 15% and that the country’s GDP will more than double.

Former Foreign Minister Francisco Aguirre noted that it was not a serious proposition to believe that construction could begin in 2014 and possibly not even in 2015. Feasibility and environmental impact studies could not be done in that time, he said, and even less could the subsequent preliminary engineering studies be finished “as these can easily take three years.”