Market News

 December 23, 2014
Nicaraguans block roads as Chinese-led mega canal project kicks off

 Chinese-financed 275km waterway, due for completion by 2020, will shorten existing shipping routes and rival the Panama Canal.

Groups of men blocked roads in Nicaragua to protest against a Chinese-financed interoceanic canal's ground-breaking ceremony last night.

"Viva Nicaragua!" they were shouting in videos shared by activists, expressing their fears about land seizures and pollution caused by the infrastructure project led by a Hong Kong-based firm.

Protesters said they had so far only blocked vehicles carrying employees of the HKND Group, the company holding the concession to build and operate the canal. Chinese surveyors have been assaulted, according to Nicaraguan media reports.

"This project will bring no benefit to the people of Nicaragua, it will only benefit the Chinese," said Danilo Lorio, a 24-year old leading the protests near San Miguelito on the western shore of Lake Nicaragua. "The compensation offer for our lands is ridiculous."

He is part of a group that calls itself the National Defence Council for our lands, lake and sovereignty. Construction of the canal would displace him and tens of thousands of others.

Scheduled to be completed by 2020, the 275km canal would allow more than 5,000 ships to cross Central America, rivalling the Panama Canal and shortening shipping routes.

HKND-led auxiliary projects include free-trade zones, international ports, tourist resorts and an international airport.

The Nicaraguan government scheduled the official groundbreaking ceremony of the construction project in the capital Managua for Monday evening, local time.

But opposition leaders say the ceremony has been hastily organised to dispel growing opposition against the project.

Wang Jing, the Chinese telecommunications magnate behind the project, and President Daniel Ortega have failed to convince communities along the canal's route, the leaders say.

"This is not the first project that the government says it is going to start, but never starts," said Ana Margarita Vijil, president of the Sandinista Renovation Movement, an opposition political party.

"Two years ago, the government gave the same Chinese company the contract to upgrade communication lines in the country and nothing has happened yet."

In 2012, Ortega awarded Beijing Xinwei Telecom Technology, another company controlled by Wang, a US$300 million contract to upgrade telecommunications infrastructure in the country.

There have been at least 17 demonstrations along the route of the canal in recent months, members of Vijil's party have said. The largest protest in Managua on December 10 attracted thousands of people.

"We are working to avoid violent confrontations," said Azahalea Solís, an activist lawyer with the Women's Autonomous Movement, who was part of an unsuccessful legal challenge to the canal. "Our country has had a long history of violence which we don't want to see again."

She said those supporting the canal were unaware of its environmental and economic cost and that up to 120,000 people would be displaced because of construction.

Outside observers have also expressed scepticism over the canal construction project.

In an article in this month's edition of Latin Trade, R. Evan Ellis, a scholar of Chinese-Latin American ties at the US Army War College argues that contractors and the country's first family could stand to benefit most from the project.

Spokespersons for HKND and the public relations firm tasked with organising the groundbreaking ceremony did not respond to queries.