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  • Michael N.

The Nicaragua Canal

In 1914, the Panama Canal opened and was a world-wide success. Ships could save thousands of sea miles, rather than going around South America on a longer route, which would need more resources and more fuel for a cargo ship. The Panama Canal had taken a while to build but as of today Panama makes over half of its economy from this canal.

Panama is a small country and surrounding the canal are mountains and rainforests. In 2016, the Canal was extended for more and bigger cargo ships to come through. It is getting increasingly more difficult to extend the canal, because of the land surrounding it and the amount of water needed. Also, not all cargo ships can fit through here. However, the Chinese Construction Company HKND (The Hong Kong Nicaragua Development Group) came up with an idea to build a canal in Nicaragua which would be wider for bigger ships and would be closer to areas like the US and Mexico.

HKND and the Nicaraguan Government agreed on a deal where HKND can build and operate the canal for the next fifty years - this agreement was signed in 2013. This was before the Panama Canal was extended. HKND ‘s plan was to build a port on the Atlantic and Pacific sides of the country and to dig two canals which go into the Nicaragua Lake. But it was easier said than done. The project was estimated to cost forty billion Dollars. The owner of HKND also lost 80% of his net worth during the 2015 Chinese Stock Market crash and neither HKND nor Nicaragua has the money to build this.

While the Nicaraguan Government said it would create 250,000 jobs, HKND said it would create 50,000 jobs of which half would come from China. Furthermore, 100,000 Nicaraguans -most of which are indigenous- would have to get relocated for this project. Lake Nicaragua was also the biggest water source in Central America supplying 47 million people and an oil spill could cause a massive clean water shortage in Central America. Worst of all, the habitats of twenty-two endangered species were going to be cut down and the environmental damage was immense.





After the Panama Canal, the Nicaragua Canal would have bigger competition and not having enough money, simply wasn’t helping. In 2018 HKND even abandoned their headquarters in China. Not starting the project was probably the best the company could do because it would have taken a very long time, even with forty billion dollars. In Nicaragua, the canal idea seems to have been long forgotten whereas in China, some believe it will still happen.

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