Nicaragua begins construction on new 173-mile transoceanic canal

The Chinese firm HKND has a contract to build the Nicaraguan Canal and operate it for 50 years. Nicaragua Canal Project Overview image from HKND

The Chinese firm HKND has a contract to build the 173-mile long Nicaraguan Canal, which will connect Caribbean and the Pacific, and operate it for 50 years. Nicaragua Canal Project Overview image from HKND

Work begins today on the $50 billion Nicaragua Canal after the Nicaraguan government and the Chinese investment firm, HKND, held a groundbreaking ceremony on Monday. The ceremony was held away from the construction in Managua, Nicaragua’s capital, amid protests against the canal.

The Nicaraguan Congress passed legislation last year to allow HKND to build and operate the canal for 50 years. Responding to accusations that the canal would draw traffic away from Panama, the government insisted that the canal was not built to rival that of Panama’s but to compliment it and lift as many as 400,000 Nicaraguans out of poverty by 2018, one year before the project’s expected completion. Advocates of the canal also argue that global shipping will increase to the point where the Panama Canal will be overcrowded, thus necessitating the construction of another maritime link between the Atlantic and the Pacific.

But the decision to build the canal has been met with increasing dissent within Nicaragua. Opponents say it is an encroachment on Nicaraguan sovereignty and will displace nearly 30,000 people living within the canal’s path. Protesters have thrown stones at Chinese vans coming to survey the land, blocked highways and held slogans that read “Get Out Chinese!” On Dec. 10, thousands of protesters marched in Managua, the largest anti-government demonstration in years.

Critics have also expressed concern about the environmental impact of the canal, which will remove almost one million acres of rainforest and wetlands. The canal will also run through Lake Nicaragua, which risks becoming polluted with industrial chemicals and invasive plants and animals.

In-depth studies on the canal’s environmental and economic impact have not been made public. Although McKinsey and Company was commissioned to produce a feasibility study, it hasn’t been released yet. HKND also partnered with Economic Resources Management to measure the social and environmental effects of the canal, but that too has been barred from public scrutiny.

The 173-mile long canal will run from the Caribbean port of Punta Gorda, pass through Lake Nicaragua and empty into the Pacific Ocean at Brito, a port on the country’s Western coast. In addition to the canal, HKND plans to build roads, factories, resorts and an international airport within a newly established Free Trade Zone. The project aims to be the first transoceanic waterway since the Panama Canal was built 100 years ago.