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Nicaragua cancels Chinese plan for controversial canal 10 years on

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Nearly a decade after it broke ground on a controversial plan to build a canal linking the Atlantic and the Pacific, Nicaragua has canceled a concession granted to a Chinese businessman to complete the project which critics said would endanger the environment and displace rural communities.

Despite a symbolic “ground-breaking” in 2014, no work was done on the canal that was to link Nicaragua’s Atlantic and Pacific coasts. At one point, crews broke ground on access roads near the canal but digging the waterway never started.

Thousands of Nicaraguan farmers had protested against land seizures meant to create a route for the government-backed project.

In 2019, a Nicaraguan judge sentenced three farmers’ leaders who participated in the protests to prison for 216 years, 210 years and 159 years. They were accused of promoting a “failed coup” against the government. Nicaraguan law caps prison time actually served at 30 years.

The proposed $50bn, 172-mile (278km) canal across this Central American country was long viewed as a joke that later turned deadly serious. The canal and its potential effect on the environment became a symbol of the odd and arbitrary nature of President Daniel Ortega’s increasingly repressive regime.

Ortega’s government claimed the canal would create tens of thousands of jobs and stimulate the economy.

Detractors argued it posed serious environmental risks, would displace thousands of families in the countryside and was financially unfeasible.

Anger over the plan was an early factor in growing public dissatisfaction with the Ortega government, which led to mass protests in 2018 that resulted in violent repression by authorities.

The canal would have bisected Lake Nicaragua – Central America’s largest lake – and forcibly displaced an estimated 120,000 people, including Rama and Creole communities from protected Indigenous territories on the Caribbean coast.

It would be one of the world’s biggest civil engineering and construction projects, dwarfing the Panama canal, and would navigate the country’s most important fresh water reserve and destroy protected natural spaces home to 22 endangered species.

The 50-year canal concession was granted to the Hong Kong-based company HK Nicaragua Canal Development Investment Compnay, owned by the Chinese businessman Wang Jing.

Critics said legislation to enable the project was expedited without legitimate consultation, environmental studies or political debate.

Before winning the concession, Wang had no experience in civil engineering and had built a fortune in telecoms. Much of that fortune was wiped out in China’s 2015 stock market crisis, when he was reported to have lost up to 85% of his wealth.

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