China's Deep­wa­ter Port by Panama Likely to Sink Nicaragua Canal

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Sci­ence, pol­i­tics and per­haps a lit­tle busi­ness may have dealt the fi­nal death blows to Nicaragua’s long-de­layed and very ex­pen­sive al­ter­na­tive to the Panama Canal.

For years, there has been a need ei­ther to ex­pand the Panama Canal to al­low more ship­ping or to find an­other route connecting the Caribbean Sea to the Pa­cific Ocean.

That other route of choice has been, up un­til very re­cently, the am­bi­tious $50 bil­lion transoceanic canal in Nicaragua. Plan­ning for the canal has come a long way, with the pro­posed route pass­ing from the city of Blue­fields on the east, across a large land por­tion first, then into Lake Nicaragua it­self and even­tu­ally to Rio Brito on the west. In all, when com­plete, the canal would to­tal some 278 kilo­me­ters in length.

The de­vel­oper for the project, if it were to con­tinue, would be the Hong Kong Nicaragua Canal Devel­op­ment In­vest­ment Com­pany of the Hong Kong-based HKND Group. It was granted a 50-year lease for the project, plus con­ces­sions for the rights to build a rail sys­tem, oil pipe­lines, mul­ti­ple in­dus­trial cen­ters along the way and even air­ports. The com­pany was also given the right to seize land where needed to do the work as well as the right to many nat­u­ral re­sources that might be un­cov­ered as part of the canal devel­op­ment. The lease was also re­new­able for an­other 50 years, at the de­vel­oper’s re­quest.

With the com­pleted canal, Nicaragua would it­self be look­ing at a ma­jor boost in eco­nomic growth on mul­ti­ple fronts, surg­ing from only 4.5% an­nu­ally as of 2013 to an es­ti­mated 14.6% some two years af­ter com­ple­tion of the canal. This would mean sig­nif­i­cant boosts in tax rev­enues and sig­nif­i­cant job growth in this ex­tremely poor Cen­tral Amer­i­can nation that, as of 2014, was the sec­ond poor­est in all the Amer­i­cas.

Be­sides be­ing am­bi­tious, how­ever, the Nicaragua canal is also seen as be­ing mas­sively de­struc­tive to the en­vi­ron­ment. Part of why is the wide swath it would make across so much of the coun­try. If it pro­ceeded, it would lay waste to ma­jor wet­lands in and around Blue­fields it­self, damage the coastal Cerro Silva Nat­u­ral Re­serve im­me­di­ately be­low it and slice into the north­ern parts of the San Miguelito wet­lands near the cen­ter of the project. In all, an es­ti­mated 400,000 hectares of rain forests and wet­lands would be de­stroyed just in those ar­eas alone. In ad­di­tion, nu­mer­ous en­dan­gered species would be im­pacted and pos­si­bly pushed into ex­tinc­tion, with oth­ers be­ing brought into en­dan­gered sta­tus.

An­other big con­cern is what might hap­pen to the 8,264-square-kilo­me­ter Lake Nicaragua right in the mid­dle of the canal’s path. Fresh­wa­ter Lake Nicaragua, the largest lake in Nicaragua and the 19th largest in the world, would be sliced in two by the canal, with ex­ten­sive dredg­ing re­quired to take its av­er­age depth of only 15 me­ters be­fore con­struc­tion to 27 me­ters af­ter. There would also likely be the de­struc­tion of mul­ti­ple crit­i­cal bi­o­log­i­cal ecosys­tems from con­struc­tion damage, salt­wa­ter seep­age and var­i­ous canal-in­tro­duced sources of pol­lu­tion.

Col­lat­eral eco­log­i­cal damage is also ex­pected on ei­ther side of the pro­jected route of the Nicaragua canal. There are the two mil­lion hectares of the Bo­sawas Bio­sphere Re­serve lo­cated just 240 kilo­me­ters north of the canal, a lo­ca­tion iden­ti­fied as one of the last places in the world for many valu­able species already near ex­tinc­tion. Only 110 kilo­me­ters south of the canal route is the In­dio Maiz Bi­o­log­i­cal Re­serve, an im­por­tant 318,000-hectare trop­i­cal dry for­est. While the

canal might not dig into ei­ther of th­ese re­serves, the fact that they are both on a mi­gra­tion path connecting across the canal, and with many species linked by wa­ter­ways and other con­nec­tions, the like­li­hood that the canal would im­pact them ap­pears high to many sci­en­tists who have looked at the sit­u­a­tion.

The pro­posed canal has already been the sub­ject of con­sid­er­able push­back in the sci­en­tific com­mu­nity be­cause to build it re­quires dredg­ing deep into the bed of Lake Nicaragua. With the likely de­struc­tion of mul­ti­ple ma­jor bi­o­log­i­cal ecosys­tems ahead, many sci­en­tists have spo­ken out with con­cerns about what might hap­pen.

En­vi­ron­men­tal Re­sources Man­age­ment (ERM), a con­sul­tant head­quar­tered in the United King­dom, was hired to an­a­lyze the pos­si­ble harm that build­ing and op­er­at­ing the Nicaragua canal might cause. It com­pleted that re­search, which even­tu­ally amounted to 14 vol­umes and 11,000 pages in to­tal. The work started in 2013 and was com­pleted in May 2015.

The sheer vol­ume of the re­port sug­gests that ERM con­ducted a very thor­ough look at the sit­u­a­tion. As the de­vel­oper, HKND Group, said, the re­port uti­lized “a wide range of sci­en­tific dis­ci­plines, in­clud­ing ge­ol­ogy, soil, ground­wa­ter, sur­face water, air, noise, vi­bra­tion, marine, fresh­wa­ter and ter­res­trial ecosys­tems” and even con­sid­ered is­sues such as “so­cial re­sources, com­mu­nity health and cul­tural her­itage, to­gether with the lo­cal econ­omy and em­ploy­ment.”

This may all be true, but from those who have seen the pre­lim­i­nary re­port, the ini­tial com­ments sug­gest it was more of a white­wash than any­thing else. Michael T. Brett, a pro­fes­sor at the Univer­sity of Wash­ing­ton’s Depart­ment of Civil & En­vi­ron­men­tal En­gi­neer­ing, was quite blunt in his com­ments. As he told Cir­cle of Blue, a re­search or­ga­ni­za­tion that fo­cuses on global water is­sues, “It seemed to me that the en­vi­ron­men­tal im­pact as­sess­ment process was to cre­ate the il­lu­sion of sci­ence.” He went on to say that, af­ter read­ing the re­port, he “had the im­pres­sion that most of the sec­tions pre­sented to us were of the qual­ity of a weak mas­ter’s the­sis at any ma­jor re­search univer­sity.”

With that kind of flack coming in, a third-party eval­u­a­tion of some of the chapters in the ERM re­port was con­ducted over two days in March 2015. The sum­mary con­clu­sions of that brief look said that the ERM en­vi­ron­men­tal study was flawed and that the whole project de­served a much more thor­ough look to con­sider what might hap­pen.

With all that talk float­ing around, one might have ex­pected the gov­ern­ment of China, con­nected with HKND

from the Hong Kong au­ton­o­mous re­gion, to make some pub­lic com­ments on the sit­u­a­tion. Many had ex­pected China to back the Hong Kong group’s devel­op­ment pub­licly and stand be­hind it. It was, af­ter all, the project of a ma­jor Chi­nese bil­lion­aire, Wang Jing.

That did not hap­pen, how­ever. In­stead, first, Nicaragua did some­thing that busi­ness and po­lit­i­cal lead­ers con­sid­ered quite stupid. Its pres­i­dent, Daniel Ortega, came out with strong back­ing for Tai­wan as an in­de­pen­dent nation, some­thing that would have drawn the at­ten­tion and ire of China any­way. Sec­ond, China qui­etly did its own anal­y­sis of the sit­u­a­tion, study­ing the grandiose and waste­ful na­ture of the Nicaraguan project – per­haps an­gry about Nicaragua’s po­si­tion on Tai­wan and also con­sid­er­ing the en­vi­ron­men­tal mess China might be blamed for just as it was be­gin­ning to take a po­si­tion at the top of the world po­lit­i­cal stage.

China then piv­oted – with the full force of its money, po­si­tion, power and even state-run me­dia – in an en­tirely dif­fer­ent di­rec­tion. In­stead of sup­port­ing Nicaragua’s canal plan, it made the de­ci­sion, via the com­pany China Land­bridge, to build the 13th-largest con­tainer port at Mar­garita Is­land, just out­side the mouth of the Caribbean side of the ex­ist­ing Panama Canal. Its me­dia praised the de­ci­sion as a “huge boost” for the coun­try’s global “Belt and Road” ini­tia­tive, and the die was cast that how to ex­pand sea traf­fic in the Panama Canal re­gion was clearly China’s choice.

As fi­nal ev­i­dence of what was re­ally hap­pen­ing in the back­ground, guest au­thor Chris Dalby re­cently wrote about the issue in the pro-china "Global Times" news­pa­per in a piece that clearly iden­ti­fied the fi­nal stake in the already-al­most-dead Nicaragua canal ef­fort. In the ar­ti­cle, Dalby wrote, “Some saw it as a chance to ri­val the U.s.-dom­i­nated Panama Canal; oth­ers saw it as a mas­sively waste­ful boon­dog­gle that had lit­tle chance of suc­ceed­ing.” He also sug­gested that Wang Jing was likely less in­ter­ested and/or in­volved now be­cause he had lost much of his wealth dur­ing the 2015 stock mar­ket crash. Fi­nally, Dalby also pointed out that the al­ter­na­tive project, off the east­ern shores of Panama, was far more likely to be backed by China be­cause “although Land­bridge is os­ten­si­bly a pri­vate com­pany, its man­age­ment is di­rectly tied to the Chi­nese gov­ern­ment, mak­ing it a good step­ping stone to­ward diplo­matic ties. For China, the deal makes com­plete sense.”

With a bloated bud­get, the po­ten­tial for a grand en­vi­ron­men­tal dis­as­ter, and pol­i­tics against it, then, the Nicaragua canal project now ap­pears to be doomed. Look to China to start talk­ing up the Panama Canal ex­pan­sion as the new “wave of the fu­ture” and be locked in tightly with full “Belt and Road” plans for the fu­ture.

Photo by in­prop­er­style, CC

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