NICARAGUAN lawmakers have granted a 50-year concession to a Chinese company for it to design, build and manage a shipping channel across the Central American nation that would compete with the Panama Canal.
The US$40 billion proposal by HK Nicaragua Canal Development Investment Co, also known as HKND Group, calls for linking Nicaragua's Caribbean and Pacific coasts and includes plans for two free-trade zones, a railway, an oil pipeline and airports.
The government says the canal, which has been discussed for decades, could boost the country's gross domestic product by up to 15 percent.
"Today is a day of hope for the poor of this country," Edwin Castro, a lawmaker in Nicaraguan President Daniel Ortega's ruling party, said before the vote marking final legislative approval of the deal on Thursday.
The Hong Kong-based HKND is headed by Chinese lawyer Wang Jing. He also leads Chinese company Xinwei Telecom Enterprise Group, which last year received a cellphone concession in Nicaragua.
"Central America is at the center of North-South and East-West global trade flows, and we believe Nicaragua provides the perfect location for a new international shipping and logistics hub," Wang said in a statement after the plan's approval. "We have a lot of work ahead, but we want to be clear that we intend this to be a world-class effort that creates economic opportunity, serves the global trade community, and also protects the local environment, heritage, and culture of Nicaragua."
Last week, Ortega said the government was going ahead with feasibility studies that should be done by 2015, when work on the canal could begin.
Those studies will define what route the canal will cut through the country. Any design would almost certainly bisect Lake Nicaragua.
Advocates say the proposal plays to Nicaragua's natural strengths, which include low-lying land and the lake.
Still, the channel would likely be three times longer than the 77-kilometer Panama Canal, which took the US a decade to build at the narrowest part of the isthmus. It was completed in 1914.
