Panama, Nicaragua canal plans stalled

Construction of a interoceanic canal in Nicaragua has been delayed by a year and will "probably" begin in 2015. The head of the canal authority, Manuel Coronel Kautz, announced Jan. 4 that more time is needed to carry out feasibility studies and choose a route. President Daniel Ortega, who promotes the project as key to Nicaragua's "economic independence," had projected construction to start in May 2014. (BBC News, Jan. 4) The setback comes as Chinese workers brought in by HK Nicaragua Canal Development Investment Co Ltd are swelling the population of Brito, a small town projected as the canal's Pacific terminus, in Rivas department. (IBT, Dec. 12)

Nicaragua's Supreme Court has rejected more than 30 appeals seeking to stop the canal plan, brought by over 100 Nicaraguan citizens who charge that the Great Interoceanic Canal Concession Law, passed last year to athorize the project, is unconstitutional. One of the litigants is famed writer Gioconda Belli, who called the law "more damaging than all the treaties Nicaragua has ever made." (AP, Dec. 18; EFE, Aug. 12)

The delay was announced just as a rival project to expand the capaicty of the Panama Canal is facing setbacks. Work on the expansion, which began in 2009, is over budget by $1.6 billion, and the Spanish-led consortium overseeing construction on Dec. 30 threatened to halt work within three weeks unless the difference is paid. The consortium, Grupo Unidos por el Canal (GUPC), is made up of Spain's Sacyr, Italy's Salini Impreglio, Belgium's Jan De Nul, and Panama's Constructora Urbana. Spanish public works minister Ana Pastor and Sacyr chairman Manuel Manrique are flying to Panama for talks on the impasse. (BBC News, Jan. 3)

Delay of the Panama project could have dire implications for US plans to turn its natural-gas bonanza into an engine of export earnings and geopolitical leverage. Today, only about 6% of the global liquefied natural gas (LNG) tanker fleet can pass through the canal; after the expansion, about 90% of tankers will be able to use it, according to a US Energy Department study. (Foreign Policy, Jan. 5)