Sandinistas approve Nicaragua canal concession

Fourth installment in a series on Nicaragua’s canal plans

(posted June 13, 2:20 p.m.)- Voting along strict party lines, Sandinista lawmakers have unilaterally passed into law a presidentially endorsed concession that gives unknown Chinese firm HKND-Group a 50-year contract to “design, develop, engineer, finance, construct, possess, operate, maintain and administer” the Great Nicaragua Canal megaproject.

After a heated—and, at times, racist—debate that included the interventions of 33 lawmakers, including most of the opposition, the canal concession was approved at 1:30 p.m. by a vote of 61 in favor and 25 against.

The new canal concession, which was presented to National Assembly less than a week ago by President Daniel Ortega, was given only a perfunctory consultation by Sandinista lawmakers, who met with the major business chambers to hear their concerns, but apparently didn’t include any of them in the final law. Environmental groups and indigenous communities that have voiced concerns about the project’s ecological impact and expropriations of tribal lands were not invited to participate in the National Assembly’s consultation process.

As civil society groups protested the canal law in the street outside the National Assembly, lawmakers argued for and against the concession on the congressional floor. Following the vote, the opposition legislators walked out of the Assembly in protest of the Sandinistas’ power play.

Reactions to Sandinistas’ ratification of the law were immediate. First Lady Rosario Murillo gushed that the canal concession is “a prophecy that has finally come true,” while critics on the blogosphere lamented, “Now we are a Chinese colony, thanks to Ortega.”

Below are highlights from this morning’s debate, so that Nicaragua’s lawmakers can be judged by their own words.

“This concession will be overturned by future democratic governments.” – Liberal Congressman Pedro Joaquin Chamorro.

“This is auctioning off our national sovereignty without consulting the Nicaraguan people.” –Liberal Congressman Luis Callejas.

“Nicaragua assumes all the risk and punishment in this law, while the investor assumes none. Who would sign a contract like that?’– Liberal Congressman Luis Callejas.

“This is illegal. Nicaragua can’t legally renounce its sovereignty.” –Liberal Congressman Luis Callejas.

“This law was written in Chinese and translated into Spanish by a computer program… We are giving up one-third of our national territory.”– Liberal Congressmen Carlos Langrand.

“We are giving the canal to an unknown foreigner…They are confiscating the historic dream of all Nicaraguans.”– MRS Congressman Enrique Saenz.

“Do you think Sandino would support a pact between Ortega and a Chinaman? What would Sandino do?” –Liberal Congressman Adolfo Martinez Cole.

“This is the birth of the second William Walker, named Wang Jing”– Liberal Congressman Javier Vallejos.

“If we had counted the votes correctly after the elections, we wouldn’t even have to be discussing this law right now.”- Liberal Congressman Raul Herrera.

“This doesn’t look like a treaty, it looks like Daniel Ortega’s last will and testament to his son, only using a Chinese name.”– Liberal Congressman Raul Herrera.

“We can’t say you are selling out the country, because you are just giving it away.”– Liberal Congressman Raul Herrera.

“Who is going to pay for this canal, the shell company in Grand Cayman?…Wang Jing doesn’t even appear on the Forbes list.”– Liberal Congressman Francisco José Valdivia.

“This law should have gone to a popular referendum…it’s going to remain a dream that this Chinese citizen can bring investment here with this law; it’s not going to happen, unfortunately.” -opposition Congressman Agustín Jarquín.

“This law is born dead because it’s not being done with the consensus of the population.”– Liberal Congressman Alberto Lacayo.

“This is not just a concession to some weird private group, but a concession (that Ortega) is giving to himself. The unconstitutional President Daniel Ortega is granting this right to the businessman Daniel Ortega to manage any contracts involved in the construction of a future canal, airports, and ports and other infrastructure in our country. This is not just a concession to a Chinese man, but a concession to an undercover company run by Ortega. He is trying to ensure his family’s economic future and in doing so taking away the country’s right to build a canal—all to enrich the Ortega-Murillo clan.”– MRS Congressman Victor Hugo Tinoco.

“The problem is not the name or the fact that the investor is Chinese. It could be Juan Ton, Fu Manchu, Bruce Lee, or Jackie Chan—that’s the not the problem. Any Chinaman can come here. The problem is the contract.”– opposition Congressman Santiago Aburto.

“The opposition wants to deny Nicaragua 10-15% economic growth and the creation of 2 million jobs. Right now Nicaragua has only 620,000 jobs.”– FSLN congressman Edwin Castro.

“This is a concession, not a privatization.” – FSLN Congressman Edwin Castro.

“The opposition doesn’t want development here because they couldn’t and didn’t deliver it when they were in power.”- FSLN Congressman Edwin Castro.

“This is a day of hope for the poor people of Nicaragua.”- FSLN Congressman Edwin Castro.

“This is the most important day in the development of Nicaragua.”- FSLN Congressman Edwin Castro.

“We are stopping to just dream and starting to build a reality, honoring the legacy of Gen. Sandino.”- FSLN Congresswoman Jenny Martinez.

“The population approves of all the programs of this government.” –FSLN Congressman Odell Incer.

“This will bring hope and illusion to this country; we can’t keep waiting.”– FSLN Congressman Odell Incer.

“This opens new opportunities for a majority of Nicaraguans, not just few. An opportunity to make ourselves into the heart of regional trade. An opportunity for consensus, an opportunity to reduce poverty and unemployment.”– FSLN Congressman Carlos Emilio López.

“Did they ask the country when they privatized energy, or health or education?”– FSLN Congresswoman Josefina Roa.

“With the Sandinista Front in government, with a government of the people, we will radically transform the economic future of this country. (The opposition) didn’t do and it and they don’t want us to do, because they couldn’t. But even those who are against this project will benefit from it. We have nothing lose by trying; don’t be defeatists. Long live Nicaragua!”– FSLN Congressman Everth Cárcamo.

“The indigenous people are not opposed to development, but development has to include our communities… Although we are not opposed to this megaproject, we disapprove of this legal procedure. The Rama people have not been consulted on this, nor has the territorial government of indigenous people living in Laguna de Perlas. Those two indigenous territories lay right in the path of five of the six proposed canal routes. This project talks about expropriation of communal territories of the indigenous, and that affects the existence and rights of the indigenous people. We can’t approve of this concession without information about it, and this law can’t substitute the legally established rights of the indigenous under Law 445.”- indigenous Congressman Brooklyn Rivera, YATAMA/ Sandinista alliance.

Next: Who/what is HKND-Group, and what is their capacity to build a canal project in Nicaragua?


  • Carlota Chamorro

    Let them Tim, they are in a process of self defeat that has to follow its own course.
    Ortega is trying to emulate the Somozas with the difference that Somoza had the Vatican and the Oval office behind him and Ortega has a dead nutz turned little bird and a mentally retarded Maduro.

    A friend from Caracas told me they will try to launder the stolen petrodolares via the canal crap.
    The Chinese is just the front man and the canal the excuse. They are desperate and the in house fighting among the Orteguistas has already started.
    Take cover, it’s gona be fun!

    • Jorge Greco Rodriguez

      The oval office turn their backs against Somoza and He’s been dead for over 30 years. Ortega and Somoza son la misma cosa, both dictators who love more their money, power and social prestige than our beloved Nicaragua….

  • Thomas

    Given expected profits of 500 million per year not including subtractions for the clyptocracy and the Chinese company that is going to build this canal only having 3 billion and needing a lowball estimate of 30 billion dollars. Who i going to to loan them 60 years of profits on a 50 year lease?

    • Thomas

      I just do not believe this going to happen. Profits are not going to go above what the Panama canal makes now. With competition they are going to go down for both canals. Sure 20% of traffic in the world will not fit in the Panama canal but that does not put that traffice in the Nicaragua Canal. It is so cheap to operate a supertanker on a per gallon of gas basis — about 19 millionths of a cent for a trip half way around the world.

      Add to that that the oil starts out in the middle East and can go to the entire Pacific without a canal available to shorten the the trip and you can see that not more than 8% Needs a canal at all. Of that 8% half is going to Europe and the Suez Canal has 62 feet of draft and will have 72 feet before the Nicaraguan canal opens. They can all go that direction. It is shorter to go that way too by about a day and a half.

  • car

    who wants to bet against me that the cayman island company is owned by whoretega or his clan?

    • Brian


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  • Ken

    Thanks for printing the legislators’ comments.

    Although there are exceptions, on the balance I find the objections unpersuasive and too often xenophobic. Nobody in Nicaragua can embark upon a project of this magnitude without the backing of a wealthy foreign investor, and I’m at a loss to understand why a Chinese investor is any more suspect than anyone else would be. Actually, it’s probably better for Nicaragua to partner with a Chinese company than a US or European one–too much bad blood there–and all hell would break loose if the company were Arabic. Also, as I understand it, the deal is a 49/51 split with Nicaragua retaining the 51. There’s no loss of national sovereignty here.

    Neither do I completely agree with Thomas’s reservations about a canal not being economically viable. Isn’t the response to this “Who cares?” The investment money alone will provide an economic boon to Nicaragua, and even if the canal ends up being used only by water skiers, some things (like the ports, airports, and pipeline) will be helpful. And this is to assume that Thomas is right that a canal is a money-loser.

    The reservations about the expropriation of lands and the project’s environmental impact strike me as valid, but small. These concerns can be addressed.

    The main problem is of course that Ortega and Murillo’s sticky fingers are all over the deal. I don’t know whether the Cayman Island company is owned by Ortega and doubt that it is, but I do doubt that he negotiated a deal that he can’t control and profit from personally.

    However, I can’t imagine anyone in Nicaragua’s opposition having negotiated the deal without an eye toward their self interest either, and if history is any guide the liberals are even more motivated by economic self interest than Ortega is. Moreover, the liberals haven’t demonstrated equivalent business competence. They had their chance to strike this kind of deal (or a superior one) for a decade and a half, but failed.

    The tradeoff is therefore between economic development and increasing the Ortega clan’s authoritarian control. My bet is that Nicas will choose economic development, and I’m afraid that I would too.

    The best outcome is if the opposition stops with the strident, racist, holier-than-Thou diatribes and works to chip away at the borders of the deal with the aim of protecting property rights, responsible stewardship of the environment, and injecting as much transparency as possible to limit the Ortega clan’s consolidation of power.

    • car

      drinking kool-aid? pipeline? to where, from where. to carry what? all the gas produced in nica? 2 international airports? yeah, because sandino is so busy with the 100’s of flights per day it is currently handling.

      this whole deal is BS and nothing more than a way for whoretega to steal more money. they approve it and THEN hire legitimate firms to do feasibility studies and “a high power PR firm”from washington? really? what for?

      you doubt whoretega is involved with the cayman firm? the only reason you set up shop in offshore havens like the caymans are for anonymity and tax savings. the government has no tax liability so the only remaining reason is anonymity. anonymity has no place in government projects.

      go read the miami herald article were a real expert discussed the financial aspects of this project and how small a chance there is that it will make money.

  • Martin Nelson

    News about Congressional approval of the Nicaraguan Canal was in our local newspaper here in California today. In general, it would seem to be a good idea to replace all the low pay zona franca factory workers (there are over 25 foreign owned “shirt Makers” paying less than $3.00 a day now in Nicaragua) with better paying technical and construction jobs. But my guess is that due to the dismal quality of education in Nicaragua most of the thousands of better paying new jobs will be filled with imported workers.

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