Lost in Nicaragua, a Chinese Tycoon’s Canal Project
BRITO, Nicaragua — A Spanish explorer conducted the first survey to connect the Atlantic and Pacific Oceans here in the 16th century. Napoleon III of France dreamed about it. The railroad magnate Cornelius Vanderbilt briefly had rights to do it. Nicaragua’s history is littered with dozens of failed canal schemes.
But when a Chinese billionaire, Wang Jing, officially broke ground in a field outside this sleepy Pacific Coast village about a year ago, many Nicaraguans believed that this time, finally, they would get their canal.
And not a small one, either. Three times as long and twice as deep as the Panama Canal, it would slice 170 miles across the southern part of the country — bulldozing through fragile ecosystems, virgin forests and scenes of incredible beauty. It would allow for the passage of the world’s largest ships, vessels the length of skyscrapers that are too big for the Panama Canal.
Yet 16 months later, Mr. Wang’s project — it would be the largest movement of earth in the planet’s history — is shrouded in mystery and producing angry protests here. President Daniel Ortega has not talked about the canal in public for months. And there are no visible signs of progress. Cows graze in the field where Mr. Wang officially began the project.
Experts say they are baffled by Mr. Wang’s canal. It may be backed by the Chinese government, part of its growing interest in Latin America, or may simply be a private investment cast adrift by the convulsions of China’s stock markets and its slowing economy.
At the time of the groundbreaking in December 2014, the Chinese government said it was not involved with the project. This and Mr. Wang’s recent setbacks — he has reportedly lost about 80 percent of his $10 billion fortune — make some experts say the deal is probably dead.
Others, however, say Chinese business practices are so opaque that it is hard to tell. Facilitating the movement of goods from the Pacific to the Atlantic aligns with Chinese interests, and the cost of the project is hardly an obstacle if the Chinese government wants to go forward — if it is involved.
Officials of Mr. Wang’s company say they are simply taking more time to do preconstruction studies.
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“It’s a project that has been notoriously nontransparent,” said Margaret Myers, the director of the China and Latin America program at Inter-American Dialogue, a policy institute in Washington. She says she believes the project is probably dead for lack of funds, but like most experts is not sure.
What does seem clear is that the project’s critics — environmentalists, human rights advocates and economists — have grown more outspoken and organized. In this part of the country, many homeowners have stenciled “Go Away Chinese” on the sides of their houses, and virtually all the re-election posters for Mr. Ortega have been hit with black paint balls.
When he announced the deal in 2013, Mr. Ortega, a left-wing guerrilla turned pro-business politician, promised that the canal would transform Nicaragua and create hundreds of thousands of jobs, eventually doubling the country’s gross domestic product. Many Nicaraguans, eager for a better future, embraced the idea, and many still do.
But a growing number say the benefits of the deal are not so clear.
Some question whether the canal would even be commercially viable. Few supertankers and massive container ships now afloat will not be able to pass through the expanded Panama Canal set to open soon. And few ports are big enough to welcome those megaships. In the short term, some experts say, the combination of the Panama and Nicaragua canals would lead to overcapacity and price wars.
There are also concerns about the seismic activity in the area, or the many volcanos. Some analysts point to China’s poor record on environmental matters and Mr. Wang’s inexperience in building anything, let alone a $50 billion (some say $80 billion) canal carving through miles of protected areas that are home to many endangered species, including the jaguar, and legally recognized indigenous lands. The little-known Mr. Wang made his fortune in telecommunications, not in construction.
And then there is the 50-mile trench to be dug on the floor of Lake Nicaragua, the largest body of fresh water in Central America — which many fear could end up contaminating, even killing, the lake.
Economists and human rights activists also object to the powers Mr. Wang has to expropriate land at far less than market rates, saying the terms of Mr. Wang’s concession could discourage anyone else from investing in Nicaragua.
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