Most importantly, the agreement says that HKND has a right to build all, some or none of the projects on its list depending on forthcoming feasibility studies and investments. This means that Wang Jing’s HKND could control territory along a potential canal route, build and control ports, pipelines and free trade zones with limited tariffs and economic sovereignty, without ever building the actual Canal.
Nicaragua formalized the rights to projects in the autonomous canal zones in its constitutional reforms last year.
Most people understand that the canal is a potential engineering and environmental disaster that may never be built, but there are certainly profitable infrastructure projects within the agreement that HKND and the Sandinistas are likely to pursue. The question has been what projects would HKND actually build. I thought the port concessions, airport concessions and potential free trade zones for manufacturing were the likely real goals of the agreement from both the Chinese and Nicaraguan sides.
However, Confidencial reports a major piece of news this week:
HKND revealed a gigantic tourist project announced as the “San Lorenzo vacation resort”, located more than 10 kilometers south of Brito, i.e., a considerable distance from the canal route. This area includes seven miles of beaches, - Ocotal, Majagual Pitahayas and Maderas- a stone’s throw from San Juan del Sur. These lands comprise hundreds of properties owned by Nicaraguans and foreigners and a dozen hotels, including the world-renown Eco touristic Morgan's Rock.
If this is true, HKND and the Ortega government will use the canal agreement and subsequent constitutional changes to expropriate some of Nicaragua's coastline and build a vacation resort, which was completely unmentioned in the original canal debate. Foreign investors who doubted whether it was safe to invest in Nicaragua's tourism industry may be proven correct.