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The promised land or a fool's dream?

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Esteban Felix / The Associated Press
Nicaragua�s President Daniel Ortega and Jing insist the mega-project will proceed.

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Esteban Felix / The Associated Press Nicaragua�s President Daniel Ortega and Jing insist the mega-project will proceed.

Not since the civil war of the 1980s have so many helicopters clattered over remote parts of Nicaragua. Now, however, the guys squinting down through the tree canopy are in suits: lawyers and business consultants from the United States, Australian engineers, British environmental auditors, even Chinese executives. Their per diems are being paid by Wang Jing, a Chinese businessman driven by a $40-billion quest to build a canal from Nicaragua's Atlantic coast to its Pacific one.

The dream of such a canal, three times as long as the one through Panama completed in 1914, is centuries old, and has made fools of all who ever believed in it. Wang already has pulled off one remarkable feat, however: He has persuaded the former revolutionaries in the Sandinista government to put Nicaragua's sovereignty in hock to make his dream come true.

To do so he has deployed little more than his personal chequebook and a bit of old-fashioned swagger in the style of Cornelius Vanderbilt, the tycoon who blazed a trail by shipping migrants from the eastern United States to its west coast via Nicaragua during the Gold Rush years of the 1840s and 1850s.

"He's a person who radiates confidence," says Manuel Coronel Kautz, president of Nicaragua's canal authority. "His company headquarters alone would cover half of Managua."

This chutzpah has played well with a government eager for someone new to believe in now that its former benefactor, president Hugo Ch°vez of Venezuela, has died.

"This lad is a revolutionary," Coronel purrs.

Since June, when the Sandinista-dominated National Assembly rubber-stamped a law granting a 50-year concession, renewable for as long as 100 years, to Wang's HKND Group, many have wondered whether the 40-year-old telecommunications boss is a crank. In August the Associated Press reported that in many countries where he has claimed to be doing business, including Nicaragua, his companies are barely noticeable.

Although both Wang and President Daniel Ortega insist the project will go ahead, people who have worked with HKND say it has more of an option to build than an obligation.

ERM, a British consultancy, is looking at the environmental and social effect of digging a deep channel through Lake Nicaragua, one of the largest lakes in Latin America, and carving through ancestral indigenous lands. Australian engineers are pondering how to remove millions of truckloads of dirt in a country with no large excavators, let alone nearby roads or railways.

McKinsey, a business consultancy, is said to be working out how the project could make enough money to entice sovereign-wealth funds to bankroll it.

The economic case is not easy to make. If the engineering challenges are too severe, even some supporters of the project say it may be impossible to raise the billions of dollars necessary to go any further. HKND argues large volumes of globally traded goods already are being carried on ships too big for the Panama Canal, even after its current expansion. Nicaragua's canal, with twice the draft of Panama's, would aim to accommodate such giants.

The project also may rest on shaky legal ground. Gabriel Ålvarez, a law professor at Nicaragua's National Autonomous University, says there have been 32 charges of unconstitutionality, a number he reckons unprecedented in Nicaragua. He points out the law gives the company unfettered, tax-free rights to vast tracts of land, which would violate the country's sovereignty.

At the same time, the government pledges to expropriate all land along the chosen route at potentially below-market rates, which has outraged indigenous groups and businessmen.

Coronel rejects such arguments. He believes the company will work in the interests of Nicaragua, overseen by a canal commission that will safeguard sovereignty.

Among those who oppose the concession are many who, under different circumstances, would see it as a lifesaver for impoverished Nicaragua.

Like many in Central America, they believe the first country to find a new way across the isthmus would reap enormous gains.

The trouble, they say, is Ortega's Sandinistas control all organs of government, including the Supreme Court, which means legal and environmental challenges are unlikely to get a fair hearing. There was almost no public debate before the law was approved.

As a result, Wang's contract may not be safe if the government changes. That does not worry Coronel. The white-haired son of one of Nicaragua's most famous poets, he long has dreamed of the canal as a way of raising Nicaraguan living standards, an unfulfilled pledge of the Sandinista revolution.

His only concern, the 80-year-old says, is he may not live long enough to see the dream fulfilled.

By then, in Ortega's words, Nicaragua will have reached the "promised land."

Republished from the Winnipeg Free Press print edition October 12, 2013 D6

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