By María Julia Mayoral
Nicaragua could, within a few years, become a new international
logistics and transportation center, if an inter-oceanic canal megaproject
succeeds in this country blessed with an enviable geographic location.
"Central America sits midway along both North-South and East-West trade routes," said Chinese executive Wang Jing during a visit to Managua, "We believe this is the ideal place for another link between the Atlantic and Pacific Oceans." The company he leads has been granted a concession to undertake the canal project.
"Central America sits midway along both North-South and East-West trade routes," said Chinese executive Wang Jing during a visit to Managua, "We believe this is the ideal place for another link between the Atlantic and Pacific Oceans." The company he leads has been granted a concession to undertake the canal project.
According to international
estimates, between 2011 and 2025, maritime trade traffic will increase some 40%
and providing a route through Nicaragua for large cargo ships would provide significant
savings in terms of fuel and days at sea.
The Hong Kong Nicaragua Canal
Development Investment Group (HKND), with headquarters in the Chinese city
cited and Managua,
is optimistic about the venture, according to Wang Jing, president and executive
director of the company.
HKND Group received exclusive
rights over planning, design, construction, operation and management of the
canal and other related projects, including ports, railroads, free-trade zones
on both coastlines, airports and a cross-isthmus oil pipeline.
"Trends in world trade
and maritime transportation indicate that there is demand for a new canal. Our
intention is to build a world class project, developed in accordance with the
best international practices," the company announced.
The framework for the
concession was signed in Managua
mid-June by Nicaraguan President Daniel Ortega and the company’s directorate,
while the country’s Parliament approved two pieces of legislation supporting
the agreement.
Experts and established companies
have been contracted to undertake studies of the project’s environmental,
social, financial and technological feasibility. The British consulting firm
Environmental Resources Management will independently evaluate the project’s
social and environmental impact, in order to determine the most appropriate
route for such a canal, which could require five to ten years to construct.
Building a second Central
American canal, substantially larger that the existing one, makes sense to
HKND. Estimates indicate that the volume of Panama Canal transactions could
increase 240% by 2030, while the value of all goods transported through canals
in Panama and Nicaragua
could surpass 1.4 billion dollars.
According to this analysis,
continual growth in trade volume could lead to congestion in Panama within
10 to 15 years, clearly suggesting that another route is needed.
As for possible savings, HKND
has estimated that a ship traveling from Shanghai
to Baltimore in the United
States, using a Nicaraguan canal, could shorten its
voyage by 4,000 kilometers in comparison to a common route currently taken
through the Suez Canal and by 7,500 in comparison to a voyage around South Africa's Cape of Good
Hope. Considering current fuel prices, an average-sized container
ship could save a million dollars on one round trip using a new canal.
Preliminary estimates
indicate that a new inter-oceanic canal could capture maritime traffic carrying
450 to 500 million metric tons of goods and serve ships up to 250,000 tons, 400
meters long and 59 wide, with draughts of up to 22 meters.
Paul Oquist, the Ortega
administration's secretary for public policy believes that the canal will allow
Nicaragua
to practically double its gross domestic product (GDP) by 2018 and triple
formal employment. With the beginning of necessary studies and works associated
with the canal next year, Oquist estimates the GDP could increase by 10.8% and
by 12.6% in 2016, to subsequently stabilize around 9.5 to 10% annual growth by
2018.
NATIONAL SOVEREIGNTY
DEFENDED
Nicaragua granted a concession for construction and future
operation of the canal, but did not privatize its territory. Additionally, the
state is participating as a partner and its ownership share will expand over
time, Oquist clarified.
The concession granted the
Chinese company is for 100 years but should not compromise national
sovereignty, since the country will hold 51% ownership within 50 years,
according to Deputy Foreign Minister Manuel Colonel Kautz, who is heading Nicaragua's
Gran Canal Authority.
A canal connecting the
Pacific and Atlantic oceans through Nicaragua has been a long-standing
dream, one which was frustrated by foreign interests in the early 1900's, added
Francisco Mayorga, the country's representative to the Inter-American Development
Bank.
The 1914 Chamarro-Bryan
Treaty mortgaged national territory to the United
States government, effectively preventing the development
of a canal similar to Panama's
within Nicaragua,
the official explained.
The United States had used its military and economic
power to force Nicaragua to
forego constructing a canal without U.S. participation, to protect its
interests in the Panamanian isthmus, Mayorga concluded. (Orbe)
August 01, 2013
