Nicaragua: Interoceanic Canal Project a “Huge Failure”

Wang Jing’s 100-year concession revoked

Environmentalists and rural leaders warn that the dictatorship wants to keep alive the “Grand Interoceanic Canal Project”, which never took off in eleven years

By Confidencial

HAVANA TIMES – Daniel Ortega ordered his deputies in the National Assembly to urgently reform the Legal Regime Law of the Grand Interoceanic Canal of Nicaragua and the Creation of the Authority of the Grand Interoceanic Canal of Nicaragua (Law 800) and to repeal Law 840 to cancel the concession held by his ally, Chinese businessman Wang Jing.

Lawyer and environmental law expert Monica Lopez Baltodano described it as a “massive defeat” for the dictatorship in terms of the possibility of carrying out the canal project, and a “triumph” for the environment and peasant, indigenous, and Afro-descendant communities that would have been affected by the proposed work.

“Today is definitely a day of celebration because this would not have been possible without the consistent efforts of thousands of Nicaraguans who opposed the surrender of Nicaragua’s national sovereignty,” she told CONFIDENCIAL and the Esta Noche program.

According to Lopez Baltodano, the Ortega regime decided to revoke the concession from Chinese businessman Wang Jing “because internationally he is recognized as a swindler,” as evidenced by the bankruptcy of his Xinwei company and his expulsion from the Shanghai Stock Exchange.

“All these factors contributed to the fact that the dictatorship had no choice but to recognize the failure of the concession handed to this private Chinese investor. We have been denouncing the risks it posed to the State of Nicaragua for eleven years,” noted Baltodano.

The Failure of the Canal Project

The statement of reasons sent by Ortega indicates that the reform to Law 800 aims to “strengthen and update the national legal order, taking into account the ever-changing national and international environment,” so it suggests that “some laws need to be adapted to address these changes and maintain optimal management within the State of Nicaragua.”

“Among these changes, it is necessary to adapt Law 800, the Legal Regime Law of the Grand Interoceanic Canal of Nicaragua and the Creation of the Authority of the Grand Canal of Nicaragua, according to the new realities and to promote better performance for the benefit of Nicaraguan families,” the document read in the National Assembly states.

The Canal project was approved in July 2012 by the National Assembly, which had a Sandinista majority, and passed the “Legal Regime Law of the Grand Interoceanic Aquatic Canal of Nicaragua and the Creation of the Authority of the Grand Canal of Nicaragua” and, a year later, granted the construction and administration concession of the project to Chinese investor Wang Jing for a period of one hundred years.

However, neither the reform nor the repeal of the laws makes reference to the fact that the canal project has been one of the Ortega regime’s greatest failures. The project marked its eleventh year since it was officially announced in 2013, but no progress was ever made in its construction.

In journalistic reports, experts have criticized the project, calling it “failed” and reproaching the lack of application of a clause in the “Canal Framework Agreement,” which indicates that if the subprojects are not built within six years from the official start of the project, the government could invoke the cancellation of the concession.

Wang Jing’s Last Promise

In November 2021, according to a CONFIDENCIAL report, Chinese businessman Wang Jing, after being expelled from the Shanghai Stock Exchange, emerged from obscurity to congratulate Ortega and his wife, Rosario Murillo, for their questioned re-election as president and vice-president of Nicaragua.

In the same month, he also sent a public letter addressed to Ortega, in which he stated that the Hong Kong Nicaragua Canal Development Investment Co.; Ltd., also known as HKND Group, and he still have “faith in the great canal project” of Nicaragua.

“HKND Group and I firmly believe that under the leadership of President Daniel Ortega, Vice President Rosario Murillo, and Comrade Laureano Ortega, the Nicaraguan people will continue to promote social progress and economic development in Nicaragua, overcoming all obstacles along the way. The great Nicaraguan people and the great Chinese people will deepen the historical fraternal friendship between the two nations, and Nicaragua will surely become an indispensable pivot along the Belt and Road,” wrote the Chinese businessman.

CONFIDENCIAL reports have documented that the approval of the canal law, with its threat of expropriating any property necessary, even if it was outside the concession area, generated a wave of discontent that especially affected farm sectors, who found there was a risk of displacement, leading to the organization of about a hundred marches against the initiative promoted by Ortega.

The regime’s insistence on continuing with the project has resulted in, in recent years, not only the loss of considerable funds allocated annually from the national budget to the Authority of the Grand Canal of Nicaragua, but also the persecution of thousands of peasants, who are now exiled, imprisoned, or hiding in Nicaragua.

The Project Has Not Yet Been Buried

The reform also removed the current board of directors of the Authority of the Grand Interoceanic Canal of Nicaragua. Now, the Minister of Transport and Infrastructure, Oscar Mojica, will be the new president of that entity.

The vice president will be a delegate appointed by Ortega for the Caribbean Coast, while the secretary will be the adviser for investments, trade, and international cooperation in the Office of the Presidency of Nicaragua, and the dictator’s son, Laureano Ortega Murillo.

“The Directorate of the Authority of the Grand Interoceanic Canal of Nicaragua will have the power to coordinate with the competent government authorities all matters related to the planning or operation of the Grand Canal of Nicaragua,” according to the reform approved by the Ortega-controlled National Assembly.

It will also be responsible for “approving and promoting the representation of the Authority in national or international societies or corporations, whether private, state-owned, or mixed.”

Danger Remains “Active”

Environmental law expert Monica Lopez Baltodano noted the fact that the regime did not repeal Law 800 suggests that they intend to “maintain the idea that the canal project is of national interest and that the State of Nicaragua has the power to decide on that mega-project.”

She also indicated that the regime has “an enormous difficulty in acknowledging the absolute failure of what was the center of its promise of economic development for the country.”

However, Lopez warned that we must be wary of the possibility of other fraudulent businesses being presented under the protection of Law 800,” noting it is clear that “the risks of expropriation and aggression against communities” persist.

Rural leader Francisca Ramírez stated that the fact that the law was not repealed “raises more doubts” because it is unclear “to whom they will grant this concession.”

Meanwhile, rural leader and former political prisoner Medardo Mairena, said it was known from the beginning that the canal project “was unfeasible” and that their only intention was “to seize properties.”

“This has left us with grief and pain because they took the lives of hundreds of indigenous peasants for defending our rights to private property and the protection of natural resources,” Mairena stated.

Mairena, who was exiled from Nicaragua and stripped of his nationality by the dictatorship, said they would continue to denounce “any agreement” with China or any other country because “Nicaraguans will not allow them to keep selling our homeland.”

Read more from Nicaragua here on Havana Times.