Nicaraguan assembly OKs $40 bln Chinese canal to rival Panama’s

MANAGUA,  (Reuters) – Nicaragua’s national assembly today approved a 50-year concession to a Hong Kong-based Chinese company to design, build and manage at an estimated cost of $40 billion a shipping canal across the central American nation that would compete with the Panama Canal.

The proposal by HK Nicaragua Canal Development Investment Co Ltd’s (HKND Group) envisages linking Nicaragua’s Caribbean and Pacific coasts and includes plans for two free trade zones, a railway, an oil pipeline and airports.

The government says the proposed canal, which has been mooted for years by Nicaraguan lawmakers, could add up to 15 percent to the country’s gross domestic product.

“Today is a day of hope for the poor of this country,” said Edwin Castro, a lawmaker in President Daniel Ortega’s ruling Sandinista National Liberation Front party, before the vote that marked final legislative approval of the deal.

The HKND group is headed by Chinese lawyer Wang Jing, who also leads Chinese telecoms company Xinwei Telecom Enterprise Group, which last year received a cellphone concession in Nicaragua.

Last week, Ortega said the government was going ahead with feasibility studies that should be done by 2015, when work on the canal could begin.

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