Global Supply Chain News: As Crazy as it Sounds, Nicaragua Grand Canal Might Just Happen

Project Seems Preposterous, but Nicaragua Government, Chinese Company Say Effort will Kick-Off in Early 2016

 

SCDigest Editorial Staff

 

While most of the buzz these past few years has been about the logistics impact of an expanded Panama Canal that will be able to handle larger ships when the project is finally finished sometime in 2016, a plan for a competing canal in Nicaragua, which at many levels seems an impossibility, may actually just happen. The Nicaragua Interoceanic Grand Canal project would create a waterway some 276 kilometers long, including the use of Lake Nicaragua for a good portion of the passage. It would have even wider lanes than the expanded Panama Canal, allowing even larger megaships to use its service, though whether this makes any sense give US port dynamics is questionable.

Source: Global Supply Chain News: As Crazy as it Sounds, Nicaragua Grand Canal Might Just Happen

Will Brito Beach in Tola, Rivas, change from this:

Playa Brito, where the port on the Pacific Side of Nicaragua's Interoceanic Canal will be built

Playa Brito, where the port on the Pacific Side of Nicaragua’s Interoceanic Canal will be built

To this?

Panama Canal, Pacific Side Entrance

Panama Canal, Pacific Side Entrance

We’ll just have to see about that, won’t we? In the meantime, I really like this opinion piece from Supply Chain Digest because it speaks to the needs of global commerce and the reality that these super-large ships are in the ocean now, and that even the expanded Panama Canal can’t handle them. The piece details that it will save weeks of time and lots of money for these mega-ships to go through a Nicaraguan Canal.

Here’s the money quote from the piece:

So is this a real project that will come up with the massive funding required to get it off the ground, or some half-baked notion that in the end will fall of it own weight? We should know sometime in early 2016, if the Chinese and the Nicaraguans really start moving dirt or not.

USA ‘Is coming for’ Daniel Ortega for the construction of the Grand Canal of Nicaragua

AFP / MANDEL NGAN

AFP / MANDEL NGAN

Latin American leaders who choose to follow an independent US policy must be prepared for any reaction that might come from Washington. Currently, the greatest discontent for the White House is generated by the president of Nicaragua, Daniel Ortega, which the US State Department says, is acting in an “extremely hostile” US policy front, some experts believe.

Source (in Spanish): EE.UU. ‘se venga’ de Daniel Ortega por la construcción del Gran Canal de Nicaragua – RT

Short article, but IMO it’s a fairly accurate description of actual US policy towards Nicaragua and specifically the Grand Canal. Seems obvious that China owning a canal that’s actually closer and makes more economic sense to shippers to use than the Panama Canal won’t be welcomed in Washington.

The article makes a good point, that the environmental impact report directly contradicts the Obama administration’s argument. The EIR says that the canal will be viable in terms of nature conservation and water resources whereas the Whitehouse says that it will cause devastating effects of the channel on the ecology of the region.

Since the normal playbook used is to cause instability in countries and regions that don’t play along with the preferred scheme, we can expect more money to be put into the political opposition and there will be more protests.

There’s a journalist and political scientist named Igor Ignatiev who has been writing about this issue on some Russian journals such as Politikus.ru and based on Google translations, has some very interesting observations, including the following:

It is common, in general, the US strategy: Write in your region instability, shake the political situation, and thereby block the flow of investments from other countries. No one wants to invest money where it is not clear what will happen tomorrow. This, in my view, a clear signal to China not to rush to the financing and construction of the Nicaragua Canal.

I’ll let you, dear reader, come to your own conclusions. I just present this as an alternative to the mainstream media and think it’s important to get some perspective from other sources.

 

The Nicaragua Canal: A Step towards development – English pravda.ru

The Nicaragua Canal: A Step towards development

06.01.2015
The Nicaragua Canal: A Step towards development. 54295.jpeg

Manágua, the capital, and the whole country celebrate the fulfillment of a century-old yearning: the building of a work that promises to become a valuable trade and communication route, in addition to giving a major boost to the development of this nation. In December the construction works for the Grand Canal began.

Managua (Prensa Latina) For Nicaragua, December is the month of great events and this 2014, for many, will be remembered in the history of the country and the world: the expected Christmas festivities accompanied the start of construction of the “Grand Canal”.

42 years ago, in the last days of 1972 Managua was devastated by an earthquake of 6.2 magnitude on the Richter scale that caused the death of over 10,000 people and enormous material damage.

read the rest at: The Nicaragua Canal: A Step towards development – English pravda.ru.

As you may have seen on this blog before. Here, here, and here for example, we’ve posted several stories on the Great Interoceanic Canal of Nicaragua (!!) that take their lead from what I observe as a U.S focus on the hemisphere, i.e. concern for where the funding is coming from, the impact on the environment, the impact on people living on the land the canal will be built in/on, whether this is purely a Chinese- and others-land grab, etc.

This article comes from a website known by most for their propaganda, the used-to-be Soviet, now Russian Federation mouthpiece for newspeak, Pravda. Now don’t get me wrong, I don’t distinguish this source of information as either better or worse from any particular promulgator of agitprop and indoctrination, I just note these for your benefit, oh reader(s)…while trying to help make sense of the whole Canal project.

I’ll admit that I initially came into this from an anti-Canal point of view. Based on some new developments in this story, I am starting to come around to view the project in a more positive light with several big IFs, WHAT IFs, and WTFs? still hanging around that serve to put a restraint on a real gung-ho old-fashioned Chamber of Commerce push for the project at any cost.

Far from it actually, as trust in all the parties involved to do the right thing (by whose measure?) must be earned by actions and good works rather than solely vague statements based more on aspirations than on real results.

This piece is a pure fluff piece, as if readers won’t remember Pravda from the good old days of mutually assured destruction and all that cool James Bond spy stuff! Or, if you’re too young for that (enjoy your youth hehehe) take a look at a map and understand that both China and Russia are very interested in having about 9% of worldwide shipping pass through a little country like Nicaragua that isn’t necessarily in the back pocket of the USA. Enjoy!

Nicaragua’s Canal, shallow science and phony environmentalism

Tortilla con Sal, December 6th 2014

Western media coverage of Nicaragua’s interoceanic canal has been almost uniformly hostile and often woefully ill-informed since the project was announced in 2013. The most recent attacks have focused on the alleged disaster the canal represents for Nicaragua’s natural environment, mixed in with largely gratuitous attacks on the Nicaraguan government and the Canal’s Chinese main contractor, HKND. A casual reader could be forgiven for concluding that the project is hopelessly misconceived and highly likely to ruin an untouched natural environment.

For example, the Smithsonian magazine has published critical articles by Matthew Shaer and Rachel Nuwer very similar to other reports, for example by James Griffith in the Global Post or in the mainstream corporate media. These consistently inaccurate reports attack the Canal based on superficially authoritative, allegedly science-based arguments. One group, the Association for Tropical Biology and Conservation has produced a resolution against the Canal, while other scientists have published criticism in environmentalist publications, for example in Nature magazine.

Some specific criticisms by environmentalists have already been accepted and incorporated into the Canal’s still developing planning stages. But the wider general arguments are often confused, flawed on matters of fact, generally unscientific and blatantly biased in what they argue and almost without exception downright dishonest in terms of what they omit. The article by Matthew Shaer is a good place to start.

Nicaragua’s Canal, shallow science and phony environmentalism | nacional y región centroamericana.

This is sort of “the other side of the story” of the planned Interoceanic Canal, an article by Tortilla con Sal, who is a writer using a pseudonym. He or she writes on a Sandinista propaganda website, http://tortillaconsal.com, which features articles on the latest messages from first compañera Rosario Murillo, letters written by Daniel Ortega to Russian president Vladimir Putin and vice versa, and images of the Daniel and Rosario along with Blanca and Sandino, early Nicaraguan revolutionaries.

blanca_sandinorosario_danielPutting that aside for the moment, when we look at the argument being made in the linked article, it is good to hear the other side of the story, as most reporting by western media has been negative about the canal; its environmental problems, taking of poor peasant’s land, lack of transparency, who will be funding construction, etc.

The facts are that no environmental impact reports have been released. The writer says it is because they have not be completed. Also, that the construction set to begin this month (December 2014) is not to begin dredging the canal, but to begin work on two large ports, one on the Pacific and the other on the Caribbean.

The writer then goes on to state that it is extremely unlikely that the canal work will begin before the environmental impact reports are released. Well, I should hope so! But even if this were true, logically there are environmental impacts for deepwater ports, airports, tourism projects, and commercial and manufacturing area, etc.

Where the author does make a good point is that the deforestation of the eastern part of the country is already well underway and that there is very little pristine forests to be ruined through the construction of the canal, and that in fact they will have to plant hundreds of thousands of trees to keep the watershed intact, which will a net plus as far as number of trees goes.

What I don’t see is how there can be complete mitigation of the damages that will be done to Lake Nicaragua. The waste silt from yearly dredging of Lake Nicaragua alone is an issue, much less the oil spills that will inevitably come.

There is a point to be made that if Nicaragua has the money, it will be able to help the environment that much more by treating dirty water, preventing toxic runoff, etc. whereas now they have squat as far as funds to help maintain natural areas.

The other area where I have to admit the author has a point is the political aspect of these anti-Canal articles. Certainly the United States would rather that the Chinese do not control a canal that is wider then the Panama canal, where the largest ships ever built can pass through, and where the location saves a thousand kilometers of distance between major ports such as New York and Los Angeles, saving millions of dollars in shipping costs. So many publications, organizations, and writers take their cues from these geopolitical issues and put a definite slant to their findings, articles, and positions.

So, to sum up, this article is well worth reading and while I don’t agree completely with the statements made, there are some good points that most of the mainstream press articles do not address. I am a believer that technology and engineering can mitigate much of the damages that will be incurred, but there needs to be a commitment on the part of HKND and the investors to see this thing through, to really dedicate significant resources in mitigating the environmental damages, and to treat the people whose lands will be expropriated with decency and fairness. That, to me all remains to be seen!

ATBC Resolution: Halt the Interoceanic Canal in Nicaragua |

ATBC Resolution: Halt the Interoceanic Canal in Nicaragua

Posted on October 24, 2014 by tropicalbiologyCanal-1

In June 2013, the Nicaraguan government granted a concession to the Hong Kong Nicaragua Development Corporation (HKND) to build an interoceanic canal connecting the Pacific Ocean and the Caribbean Sea, through Nicaragua, traversing Lake Cocibolca (also known as lake Nicaragua), along with multiple infrastructure development projects of considerable size. Planned developments include a 400 km2 artificial lake, multiple tourist complexes, factories to produce construction materials, and hundreds of kilometres of paved roads through otherwise inaccessible rainforest.

via ATBC Resolution: Halt the Interoceanic Canal in Nicaragua |.

The Association for Tropical Biology and Conservation has come out firmly against the Nicaraguan Interoceanic Canal, citing the need for independent environmental studies and urging a review of the impacts to the environment and the people who currently live in the canal zone.

Nica Insiders are saying that with the wide swath of land awarded to the Chinese company, it is quite likely that they will just sell off the land and its resources to the highest bidder and then maybe see if they want to build an actual canal, leaving the country with all of the negative effects but none of the positive economic boom that President Daniel Ortega is promising the Nicaraguan people.

The monstrosity of the Canal| La Prensa

The monstrosity of the Canal

By: Ernesto Cardenal

Author and poet Ernesto Cardenal

Author and poet Ernesto Cardenal

We need to expose to the world what is happening in Nicaragua.

President Daniel Ortega, with the all-embracing power that he and his wife have in this country, had the National Congress create and approve (in one day) a law for the construction of the Interoceanic Canal. The people were not consulted at all about this law. The day after the law was passed, a concession was granted  with dizzying speed, although it will affect Nicaragua for over one hundred years. The award was made to a previously unknown Chinese named Wang Jing. The award only grants rights to Wang Jing but does not impose any obligations.

The grant was made without any previous study, as President Ortega himself has said.

The grant requires that all information about the construction of the Canal will remain confidential.

The grant, which was made without any bidding, includes an airport, two ports, a railway and two free trade zones.

National territory has been given so that these works can be carried out where Wang Jing wants and he will have all the permissions to make whatever decisions that may be required. He will have complete license, permit or authorization that he will ever need.

The State of Nicaragua will not receive a single penny in taxes or charges for any of the works.

Under the agreement the Chinese company signed, they are beyond national law, free of responsibility for any administrative, civil or criminal liability or penalty, even if they default on their obligations.

The law is contradictory to many aspects of our Constitution.

It also contradicts other projects that might be more profitable in the long term than cutting apart in two the tourist corridor of the Pacific.

The famed Humboldt Center has stated that the construction of this canal and its Project Partners are the biggest threat to environmental conditions in the country’s history. They also claimed that this concession exempts all Project Partners from compliance with environmental legislation which may be exposing the country to irreversible ecological destruction.

The State of Nicaragua would receive one percent of the shares each year, and in one hundred years would have one hundred percent of the shares.

With every passing ship, a huge amount of fresh water would go to the sea.

The Great Lake of Nicaragua will only have one utility: navigation. We cannot produce food through irrigation, we can only see boats passing by.

Nor can we drink water from the lake. We must also take into account that many people live by fishing in the lake and now they will not have that as an option.

All our water, surface and underground will be given to a Chinese man.

To the owners of the land that will be expropriated by this Chinese man will pay a price for the land at the land registry (i.e. tax declaration) value and not market value.

36 cities would be affected by the loss of the lake, as well as many smaller towns.

The Isletas of Granada will disappear because he locks will raise the lake level by two meters.

This nightmare scenario is what President Daniel Ortega calls the “Promised Land.”

Many experts say that Nicaragua would earn more by selling potable drinking water than from the income of a canal that won’t be ours for a hundred years.

With this Canal, the country will be divided into two, the Nicaragua North and South, as there were two Germanys and as there are two Koreas. There will be two distinct populations of animals (except those that can fly) that will be different over time. which will hurt our biodiversity.

Solentiname has been declared a national monument, but without the lake there will be no more Solentiname. Someone from over there said: “I’ll be eating a lot of fish, afterwards there will be no more because all the fish will be canned by the Chinese.”

With this Canal, Lake Nicaragua, which for us is a great blessing of God, will become a curse.

Doing away with Lake Nicaragua would be the greatest crime in the history of our country, and Ortega would become a more abominable figure than William Walker$.

via The monstrosity Channel | The Press News.

Very clear and direct words from a great Nicaraguan poet and writer, Ernesto Cardenal. I hadn’t thought about the idea that the isletas will basically disappear with a rise in the lake levels of 6 feet, but it makes sense.

Nicaraguan Insiders tell me that this is just a land grab. As I’ve posted elsewhere on this site, lets hope the worst case scenario does not come to pass. Please share far and wide!

Nicaraguans rise up against Chinese canal (Fusion.net)

Nicaraguans rise up against Chinese canal

A main protest

Carlos Herrera

Riseup-banner

NUEVA GUINEA, Nicaragua — Nicaragua’s muddy countryside rumbled under the staccato of horse hooves and rubber boots on Tuesday as more than 1,000 campesinos marched through Nueva Guinea to protest the construction of a $50-billion, privately owned Chinese canal that would rival Panama’s interoceanic waterway.

Under the banners “Our land is not for sale!” and “Chinaman, go home!” Nicaraguan farmers and cowboys vowed to defend their properties from government expropriation and Chinese encroachment.

protest women

“I would rather die than hand over my property,” march organizer Francisca Ramirez, 39, told Fusion in a phone interview from Nueva Guinea, 175 miles east of the capital. “The people living in this region are already living in extreme poverty. Where are we supposed to go if the government kicks us off our land?”

Suspicions of Nicaragua’s left-wing Sandinista government have turned to alarm as the country’s perpetual president, Daniel Ortega, hatched a perplexing partnership with enigmatic Chinese businessman Wang Jing in 2013. Now, the two are preparing to expropriate land from 7,000 mostly poor Nicaraguan families to make way for an ill-conceived 172-mile canal megaproject that many doubt will ever get funded, much less built.

NICARAGUA-CHINA-CANAL

Nicaraguan President Daniel Ortega and Wang Jing  (photo/ AFP)

More than a year after the president’s Sandinista Front rushed a sovereignty-compromising concession law through his rubber-stamp congress, Nicaraguans still don’t know how much the Chinese canal will cost, who will pay for it, whose land will be confiscated, or what the environmental impacts will be on the country’s expansive Lake Cocibolca, considered by many to be the future source of drinking water for all of Central America.

 

Read the rest here.

I’ve been following this developing story and am trying to read the tea leaves here since the whole process is so non-transparent that the waters are muddier then the Mississippi river. (Mix your metaphors much?) I’ve been leaning towards the worst case scenario being that which actually comes into being, but this article by Tim Rogers pretty much is an additional strong data point indicating that will be the case here with the Interoceanic Canal of Nicaragua. It’s a Chinese land grab. The canal won’t be built, at least completely. They’ll just get a hold of a bunch of land, screw up the environment as much as possible without actually completing the canal, leaving Nicaragua with all of the problems and none of the potential benefits.

All I can say to the prospective visitor to Nicaragua who actually wants to see the natural environment that is as deep and dark (and biodiverse) as anything the Amazon can dish up best get their butts down here ASAP. Do it in 2015 would be my advice!

Tuleños close ranks against the Grand Canal | La Prensa Noticias

Tuleños cierran filas contra el Gran Canal | La Prensa Noticias

Tuleños close ranks against the Grand Canal

“What do the countryfolk want? That the Chinese are gone!” shouted residents of El Tule, San Miguelito yesterday.

About two thousand people, including farmers, producers and people from communities and counties that would be affected by the construction of the Grand Interoceanic Canal in El Tule, jurisdiction of San Miguelito, Rio San Juan, joined protests against the mega project.

“The people of El Tule and producers demand respect for private property. No Canal. In the municipality of San Miguelito we are not sellers of land,” read the banners that led the long march that began yesterday at around 10:00 am and walked about four kilometers to go around the town and crossed the river bridge Tule, which traced the route of the controversial Canal.

On foot and horseback wearing the blue and white flag, banners, signs and amidst a torrential downpour, protesters arrived from the villages of El Roble, El Dorado I, II and III, Quebrada Seca, El Fajardo, La Tigra, El Naranjo, La Conquista, El Monge, El Tamboral, Los Portreros, Las Marias, Aguascalientes, El Congo and Las Raizones.

 


via Tuleños cierran filas contra el Gran Canal | La Prensa Noticias.

I started following this topic recently, as the whole Canal project is just possibly the biggest and from some perspectives, the best thing ever for Nicaragua. It could also end up being a half-dug ditch with all the environmental damages done but no funds to mitigate the damages. If the project is completed, if is not constantly maintained, no income will be there to fund mitigation efforts.

Question marks grow over mystery magnate behind the Nicaragua canal

Question marks grow over mystery magnate behind the Nicaragua canal

Decide one of two things: whether this is just a plain land grab of these poor campesinos but no actual Canal being built, OR do the project right and make sure it will be properly maintained going forward.

It appears I’m at the point of just hoping one of the worst-case scenarios does not come to pass…

Nicaraguan Insiders say yes, this project WILL HAPPEN but I urge caution as a World Bank representative recently said on an interview show here in Nicaragua that they have received no environmental, feasibility, route, financing, basically ANY data on this project. We’ll just have to wait and see…

Alarm as Nicaragua starts canal route survey – Yahoo News

Alarm as Nicaragua starts canal route survey

Associated Press

FILE - In this Dec. 5, 2013 file photo, Rodolfo Molina, an 81-year-old retired mechanic, dries rice for storage outside his home where he has lived for 40 years in Rivas, Nicaragua. Rivas is the town where the first phase of an Inter-Oceanic canal is planned to be built in 2014. Teams from the China-based HKND Group have been interviewing property owners in Rivas, alarming homeowners who fear they'll lose their homes. (AP Photo/Esteban Felix, File)
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View photo

FILE – In this Dec. 5, 2013 file photo, Rodolfo Molina, an 81-year-old retired mechanic, dries rice for storage outside his home where he has lived for 40 years in Rivas, Nicaragua. Rivas is the town where the first phase of an Inter-Oceanic canal is planned to be built in 2014. Teams from the China-based HKND Group have been interviewing property owners in Rivas, alarming homeowners who fear they’ll lose their homes. (AP Photo/Esteban Felix, File)

MANAGUA, Nicaragua (AP) — Teams of assessors accompanied by soldiers and police have begun surveying properties along the route of Nicaragua’s planned interoceanic canal, taking quick steps toward the start of a vast project the country has dreamed of for more than a century.

But the process is alarming many residents, who say they fear they’ll lose their homes and receive unfair compensation.

Teams from the China-based HKND Group this month began interviewing property owners in the Brito River region in southwest Nicaragua, where the first phase of the $40 billion, 173-mile (278-kilometer) canal is supposed to be built starting late this year.

“The census is normal. We had announced that we would go house by house, farm by farm, to see what they have, what they don’t have,” Canal Commission spokesman Telemaco Talavera said Tuesday. He said the purpose is to assess the value of properties “to pay them what is just for each one.”

But some property owners have complained that the joint Chinese-Nicaraguan teams are accompanied by police or soldiers, as well as representatives of the attorney general’s office.

Read the rest here: Alarm as Nicaragua starts canal survey – Yahoo News.

FILE - In this Dec. 5, 2013 file photo, Rodolfo Molina, an 81-year-old retired mechanic, dries rice for storage outside his home where he has lived for 40 years in Rivas, Nicaragua. Rivas is the town where the first phase of an Inter-Oceanic canal is planned to be built in 2014. Teams from the China-based HKND Group have been interviewing property owners in Rivas, alarming homeowners who fear they'll lose their homes. (AP Photo/Esteban Felix, File)

FILE – In this Dec. 5, 2013 file photo, Rodolfo Molina, an 81-year-old retired mechanic, dries rice for storage outside his home where he has lived for 40 years in Rivas, Nicaragua. Rivas is the town where the first phase of an Inter-Oceanic canal is planned to be built in 2014. Teams from the China-based HKND Group have been interviewing property owners in Rivas, alarming homeowners who fear they’ll lose their homes. (AP Photo/Esteban Felix, File)

 

So here is where the first major challenge is with this “canal project.” I put quotation marks on it because if I were to guess, this is just a way for the current Nicaraguan government to get back into the land confiscation business, albeit this time with a veneer of legitimacy due to the outlandish terms of the agreement made with HKND, the Chinese firm that has the contract to build and operate the canal.

I find it interesting that  the path of the proposed canal also happens to be some of the most highly valued properties in Nicaragua. Lakefront, oceanfront, along the corridors of movement of goods and people, etc.

 

A Chinese Man, A $50 Billion Plan And A Canal To Reshape Nicaragua : Parallels : NPR

A Chinese Man, A $50 Billion Plan And A Canal To Reshape Nicaragua

by CARRIE KAHN

August 14, 201410:35 PM ET

Listen to the Story

Morning Edition 4 min 50 sec

A family swims in Lake Nicaragua, which will encompass nearly half of the proposed canal's 172-mile route. Environmentalists worry that oil spills, pollution and dredging will destroy the country's largest supply of fresh water.

A family swims in Lake Nicaragua, which will encompass nearly half of the proposed canal’s 172-mile route. Environmentalists worry that oil spills, pollution and dredging will destroy the country’s largest supply of fresh water.

Carrie Kahn/NPR

One hundred years ago today, the first ship passed through the brand-new, U.S.-built Panama Canal; a century later, Panama owns the canal outright, and the country is one of the most prosperous in the region.

Panama’s neighbor to the north, Nicaragua, is hoping a transoceanic canal and similar prosperity are in its near future. The government has joined forces with a Chinese billionaire to construct a 173-mile, interocean canal.

It may cost more than $50 billion, but the government says the mega-project is critical to lifting the nation out of dire poverty. Critics say the environmental and social damage will be irreparable.

Credit: Alyson Hurt/NPR

Credit: Alyson Hurt/NPR

 

via A Chinese Man, A $50 Billion Plan And A Canal To Reshape Nicaragua : Parallels : NPR.

Great reporting by Carrie Kahn of NPR. She’s been doing some good pieces for them as the NPR Latin American person living in Mexico City but reporting on the Caribbean and Central America too. The great thing about radio is that you can hear the people discuss the plan and its potential effects and feel the emotion and perhaps concern in their voices.

As we’ve reported here before about the current plan for the canal, there was a plan as far back as about 130 something years ago too. But Nicaragua Insiders tell me that the government and Daniel Ortega are determined to see this through, so it may actually become somewhat inevitable.