Nicaragua Sets Canal Construction Start Date In December, Leaving Questions Over Funding, Environmental Impact

After months of closed-door meetings, uncertainties and an escalating chorus of protests, Latin America’s largest-ever infrastructure project seems to be barreling forward. Nicaragua is set on breaking ground for its massive interoceanic canal, meant to rival Panama's, on Dec. 22, according to executives from the Chinese contractor tasked with building it.

“The Nicaraguan people will get a big Christmas present,” said Paul Oquist, executive secretary of the Grand Canal Commission, in a recent interview with the Guardian.

Government officials have hailed the canal as an engine to lift millions of Nicaraguans from the depths of poverty. But as the proposed construction date looms just weeks ahead, the public is still in the dark on a number of critical details – namely, who is funding the project, and what its impact might be on nearby landowners and the country’s largest freshwater source, Lake Cocibolca, also known as Lake Nicaragua.

Uneasiness has clouded the project since the Hong Kong Nicaragua Canal Development Group, headed by Chinese entrepreneur Wang Jing, won a concession in June 2013 to design, build and operate the canal, which is expected to be 173 miles long and bisect the country. Nicaragua’s government did not open up bids to any other companies. To date, HKND hasn’t disclosed the names of investors who are funding the canal, which is expected to cost at least $50 billion.

HKND executives and representatives from Nicaragua’s ruling Sandinista party held a marathon press conference last week, reportedly lasting more than 10 hours, to lay out the latest developments on the project, including a 3D animated visualization of the proposed route. But they still failed to quell mounting concerns over its environmental impact. “They announced a variety of things, but we still don’t know where the [construction] will start,” said Rosario Saénz, a lawyer and vice president of environmental advocacy group Fundenic, in an interview with Nicaraguan news outlet La Prensa. She noted that the information released at the press conference was muddled and confusing.

“The company hasn’t demonstrated how or why the canal will pass through the lake, and how they will avoid damaging it,” she said, adding that while HKND execs have publicly said they would not use dynamite to dredge Lake Cocibolca, one adviser to the company asked directly about the issue said it would be used, albeit only in small amounts. “There is a series of inconsistencies in things they’ve said that, in reality, reveals that not even they themselves are clear on what they are doing,” Saénz added.

During the press conference, Kwok Wai Pang, HKND’s subdirector general of construction, said the company would “follow a construction plan with a minimal social and environmental impact.” But the public still hasn’t seen any concrete evidence of those claims. The official environmental impact assessment, which is being undertaken by consultancy firm Environmental Resources Management, isn’t scheduled for release until April 2015 – nearly four months after the construction start date.

Several environmental organizations, joined under an umbrella group called Grupo Cocibolca, have petitioned the government to delay the launch date until enough independent technical and scientific assessments have been released. But with Dec. 22 just weeks away, it’s unclear if the government will heed their call.

Meanwhile, thousands of residents living along the proposed canal route have amped up protests against the project over the potential expropriation of land and what some say is a new form of colonization. Local NGOs have spearheaded a campaign within the parliament to invalidate the law that granted HKND the canal concession to begin with. A repeal of the law requires a majority vote within the National Assembly, which is dominated by the Sandinistas.