Nicaragua Canal construction pushed back due to environmental concerns

Ometepe, an island in Lake Nicaragua, lies just north of the proposed canal route.  Photo: David Armstrong.

Last March I helped organize an independent panel review of the environmental impact assessment for the proposed Nicaragua Canal.  Our conclusions were made public, but the government of Nicaragua has yet to release the impact assessment.  Circle of Blue wrote a follow-up piece I posted on the blog in June (see here), and last month the Wall Street Journal questioned the economic feasibility of the mega-project:

It’s hard to make an economic case for a Nicaragua canal. Nicaragua originally estimated the cost of the 172-mile waterway at $40 billion and now it’s $50 billion. Panama Canal Authority CEO Jorge Quijano told me last summer that he estimates the project will cost more like $67 billion-$70 billion.

Extra-large container ships bring goods from Asia to West Coast ports in the U.S., where the cargo is unloaded and moved by railroads and trucks to the American heartland. But Asian cargo ships that transit the Panama Canal for the Eastern Seaboard make multiple ports of call, from Halifax to Miami and the Gulf Coast. Many of these ports cannot accommodate the largest container ships anyway, so the demand for taking them through the canal is not there. 

HKND hired a British firm, Environmental Resources Management (ERM), to study the social and ecological effects of the Nicaragua canal.   In March an independent review panel, organized by Florida International University’s Southeastern Environmental Research Center and College of Law, viewed draft copies of some sections of the report. The panel concluded that the study was done too quickly to be thorough and that ERM was not given sufficient data about the construction plan. In its response ERM agreed that the study schedule was “aggressive” and that “the lack of a final feasibility study hampered” the analysis.

There has been some skepticism among the review panel that the government would seriously consider the environmental impact assessment or our feedback, but this week the canal commissioner announced that construction would be pushed back in order to conduct the studies we've been calling for:

Paul Oquist, executive director of the government’s canal commission, said that four additional studies to identify new mitigation requirements had been recommended by UK-based Environmental Resources Management, one of the canal’s environmental assessment contractors.

“We and (Nicaragua president Daniel Ortega) have made the decision that all studies recommended by the environmental groups have to be undertaken,” Oquist said yesterday in Washington, DC at a forum sponsored by the Council of the Americas, according to IHS Maritime 360.  Oquist added: “No stone will be left unturned in terms of the environmental elements.”

The surprise announcement will be welcomed by scientists who have criticised the quality of ERM’s work in compiling the environmental impact study.

The environmental impact assessment, as far as I can tell, remains classified.  Still, that the government appears to be taking our concerns seriously is a promising sign that environmental impacts will be mitigated.  Or, as one of my colleagues pointed out, "additional studies" may be nothing more than a convenient excuse to buy time to find more investors.