Nicaragua Inter-oceanic canal: A wise move?

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.

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 significantsavings 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

Granma.cu

Caribbean countries take action to protect the marine environment from garbage

CURACAO, Netherlands Antilles -- Decisive action by the Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) at its 60th Session (22 to 26 March 2010), has resulted in the adoption of a resolution prohibiting the discharge of all garbage by ships in the Wider Caribbean Region as of 1 May 2011.

With the adoption of an MEPC resolution establishing 1 May 2011 as the date on which the MARPOL 73/78 Annex V (Regulations for the Prevention of Pollution by Garbage from Ships) Special Area regulations take effect in the Wider Caribbean, this region becomes the 6th zone to be protected against the discharge of all garbage from ships, other than organic materials under certain conditions (based on distance from shore and particle size).

Others include the Baltic Sea (effective since October 1989), the North Sea (February 1991), the Antarctic area (south of latitude 60 degrees south) (March 1992), the "Gulfs" area (August 2008) and the Mediterranean Sea (May 2009). The entry into force of the Special Area status in the Black and Red Seas, which have also been designated under the Annex V, is not yet effective.

Although the effective date is approximately one year from today, MEPC still calls on Governments and Industry to comply with the Special Area requirements as soon as possible.

The adoption of the resolution follows the notification at the same MEPC session by 22 Caribbean Parties to the MARPOL 73/78 Convention that sufficient adequate reception facilities for garbage are provided in most relevant ports within the region.

In the Wider Caribbean Region, 25 Countries are Parties to MARPOL and its Annex V. This Annex prohibits the discharge of all plastics, but allows, under certain conditions, for the discharge of other types of garbage (e.g. dunnage, paper, lining, metal, etc.), unless in designated Special Areas.

MEPC, recognizing the sensitivity of the Wider Caribbean Region (by assessing its specificities, such as the oceanography, the undersea topography, the interconnectedness of the area’s ecosystems and the shipping traffic in the region), designated the region as a Special Area under Annex V in 1991. However, due to a lack of capacity and an absence of notifications to IMO of the location of adequate reception facilities, the status had yet to become effective.

The Wider Caribbean Region contains 28 coastal and insular Countries that have coasts (may it be overseas territories) on the Caribbean Sea, the Gulf of Mexico and part of the Atlantic Ocean. It covers an area of more than 3.3 million km2, from the United States of America to French Guiana.

The region’s highly productive but extremely sensitive ecosystems provide a livelihood for many coastal communities (tourism, artisanal and industrial fisheries, sea bed exploitation) and more than 41 million people live within 10 km of the coastline.

Garbage in the marine environment poses several issues, whether environmental or socio-economic. It can damage habitats, cause the death of wildlife, but also impact the quality of life of local communities and affect the economies of a region, notably by its consequences on tourism.

A study conducted by UNEP assessed that litter from ocean-based sources of pollution (such as fishing nets, gear and supplies, ropes, etc.) accounted for at least 11% of all marine litter in our region. And this does not even include garbage that could have been disposed of from ships but was considered to originate from land-based sources (e.g. glass, metal, paper)!

According to Gaëtan Coatanroch, an IMO Consultant based at RAC/REMPEITC, the adoption of the IMO resolution shows “a strong commitment by the Parties to sustainably develop the region and decrease maritime pollution.” He also added that this is a very timely move, as maritime traffic is expected to continue to dramatically increase in the Caribbean region with the expansion of the Panama Canal. Currently, it is estimated that approximately 40 per cent of the world’s commerce passes within a day and a half sailing time of Key West, Florida.

A concern linked to this entry into force is the availability of information regarding the location of port reception facilities in the region. The Caribbean Countries now have one year to populate IMO’s database, the Global Integrated Shipping Information System (GISIS).

Assistance is already planned, and a joint UNEP-IMO regional workshop addressing this matter will be held in Panama in May 2010. Subsequently, the few Parties that do not have yet adequate reception facilities have undertaken to find alternatives arrangements (which includes forming agreements with neighboring countries), and install them as soon as feasible.

Chris Corbin, UNEP CAR/RCU’s Programme Officer for Pollution Prevention, congratulated the Countries for their collaboration on this matter, but also stressed the importance of having the entry into force as soon as possible of the related pollution control agreement for Land Based Sources of Marine Pollution, the LBS Protocol.. This will further assist efforts to tackle the problem of solid waste and marine litter in the region.

Corbin further noted that UNEP, IMO and RAC/REMPEITC will continue to implement activities on marine and land-based sources of pollution, and to assist countries in complying with regional and international agreements’ requirements for the protection of the coastal and marine environment of the Wider Caribbean.

April 15, 2010

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