Nicaragua's Commission for the Development of the Grand Canal on July 7 approved a route for the proposed inter-oceanic canal through the Central American country. The waterway, to be built by Chinese company HKND, is slated to run from the Río Punta Gorda (South Atlantic Autonomous Region) on the Caribbean Coast to Brito (Rivas department) on the Pacific coast—a route more than three times as long as the 48-mile Panama Canal. The Commission said the canal will be operational by 2020, but questions have been raised on how the Hong Kong-based company plans to finance the project, estimated at $50 billion—nearly four times greater than Nicaragua's national economy. The canal is to be privately owned and operated. Ecologists have raised concerns about impacts on Lake Nicaragua (also known as Cocibolca), Central America's largest lake and an important fresh-water source for the country. There are fears the the water used by the canal's locks could seriously deplete the lake. The Río San Juan, which feeds the lake and forms the border with Costa Rica, would be dammed to feed the locks. Costa Rica has formally demanded the right to review environmental impact studies for the project before work begins. The Rama-Kriol indigenous people, whose territories in the Punta Gorda river basin would be impacted, are demanding to be consulted on the project. (La Prensa, Nicaragua, July 17; Tico Times, Costa Rica; July 15; Nicaragua Dispatch, Reuters, El Financiero, Mexico, July 8)

Approval of the canal route came days before Russia's President Vladimir Putin made a surprise visit to Nicargua, fueling speculation that Russia is a "silent partner" in the canal project—rumors which were denied by the government of President Daniel Ortega. In alliance with Venezuela, Russia has had a resurgent military presence in the Caribbean in recent years. But retired Gen. Alvaro Baltodano, economic advisor to President Ortega, denied that there was any military or political aspect to the project. "We are not in a position to build something for geopolitical reasons or other reasons," he said. "Here the goals are very clear, and exact, and very transparent." (Nicaragua Dispatch, July 12)

Similar fears about military encroachment on the traditional US "backyard" of Central America and the Carribean were raised in 1997, when Hutchison Whampoa, another Hong Kong-based Chinese company, was granted a concession to run the Panama Canal after the US turned full control of the former Canal Zone to the Panamanian government in 1999. (Miami Herald, Aug. 25, 1999)