PDF version ]
i n v e s t i g a
t i o n
The acronym PPP takes on new meaning as canal projects reveal potential prospects for profiteering.
Nicaraguan Transportation Corridor Developers Hitch
Hopes to Plan Puebla-Panama (PPP)
by Wendy Call | April
In the Pacific Nicaragua department of Rivas, two bulldozers and a steamroller
gouge a path through the coast’s dry forest and mangroves, transforming
a narrow, dirt road into a wide, paved highway.
It is a scene portending an era of transportation development that post-revolution
land speculators and foreign investors hope will be bolstered by Mexican
President Vicente Fox’s Plan Puebla-Panama (PPP), a blueprint for area-wide
industrial development of southern Mexico and Central America.
Apparently not least among the hopeful is former Nicaraguan President
Arnoldo Alemán, who bought up dozens of properties here on the
Pacific Coast during the latter part of his five-year term, which ended
this past January.
A neat row of whitewashed, thatch-roofed weekend cabins stretches from
the brown line of the construction site to the blue water of the coast,
contrasting with scattered, weather-beaten huts of local fisherfolk to
The plots are far from the beaches of San Juan del Sur, Nicaragua’s only
real tourist resort, and located on low-quality agricultural land. Alemán’s
purchase of properties like these might seem a poor investment decision,
but for one thing: They lie close to one of two proposed routes for what
developers are calling a "dry canal."
Dry canal plans for Nicaragua envision a high-speed railway that will
connect two large container-shipping ports on the country’s Atlantic and
Pacific coasts. Two companies, Interoceanic Canal of Nicaragua (CINN)
and Global Intermodal Transport System (SIT-Global), are vying for a government
concession to build and operate the ports and trans-isthmian railway link.
In May 2001, the Nicaraguan National Assembly granted both CINN and SIT-Global
permission to complete feasibility studies and environmental impact statements.
After those are done, the government will grant one company a 30-year
Developers Hitch their Hopes
The would-be dry-canal builders appear to be angling to have their proposals
folded into Plan Puebla-Panama. Since Fox first announced it in September
2000, the PPP has become the primary infrastructure development plan under
discussion for the Central American region.
Plan documents from the Inter-American Development Bank and Central American
Bank for Economic Integration do not mention a Nicaraguan dry canal. Rather,
four highway connections between the Atlantic and Pacific Oceans are listed:
1) across central Mexico from the port of Veracruz to the port of Acapulco;
2) across Mexico’s Isthmus of Tehuantepec, between the ports of Coatzacoalcos,
south of Veracruz, and Salina Cruz, in the state of Oaxaca; 3) between
the Port of Cortez in Honduras and the Port of Cutuco in El Salvador,
and 4) across the Panamanian isthmus.
Nonetheless, SIT-Global has held meetings with PPP project designers,
lobbying for their proposal to be added to the plans. Company President
Juan Carlos Rivas claims that railroads make more economic sense than
highways for the PPP. He notes that the SIT-Global route could be part
of a Mexico-to-Panama rail network, as well as providing inter-oceanic
Although the sketchy details on PPP released to date don’t offer any
information on rail development, plan Coordinator Florencio Salazar says
that railroads are indeed part of the project.
Dry Canal Proposals Milk Foreign
CINN, founded in 1994, envisions a 234-mile, double-track railroad that
could carry 1,000 shipping containers a day. It would run from Pie de
Gigante, 10 miles south of Alemán’s string of Pacific Coast properties,
north around Lake Nicaragua, and then southeast to a port at Monkey Point
on the Atlantic.
The largest ocean going ships each carry up to 3,500 containers, so CINN
imagines handing two such ships each week. The railroad would include
a 500-meter right of way that would become public property. It isn’t clear
what provisions would be made for people, animals, and traffic in that
CINN estimates transit time for a container–including on-loading and
off-loading–would be eight hours and would cost $450. In contrast, CINN
reports, the same container crossing the United States via the interstate
highway system requires five days and costs approximately $3,000.
According to company President Don Bosco, "CINN is majority owned
by U.S. citizens who conceived the idea of the Dry Canal Project and brought
it to Nicaragua from Costa Rica."
Bosco notes that the canal project has become highly coveted. "Several
attempts have been made by locals to try to steal the project from CINN,
first from within, which failed, and now from the outside by forming a
parallel company called SIT-Global," he says.
In an interview, SIT-Global President Rivas grinned widely as he showed
a business card that read, "Juan Carlos Rivas, General Director,
CINN." Rivas spent several years pushing CINN’s plans to potential
foreign investors before deciding to start up his own company and give
CINN a run for its money.
Like CINN, SIT-Global proposes to operate an Atlantic port at Monkey
Point. The SIT-Global rail line also would follow a path very similar
to CINN’s from the Atlantic to the north end of Lake Nicaragua, but then
takes a sharp turn north, ending at Corinto, a small port 40 miles south
of the border with Honduras. Though small, Corinto is the largest Nicaraguan
port in operation. The route’s total length would be 293 miles.
In late 2001, CINN investors in the United States filed two suits in
the New York courts, alleging that Alemán, two of his relatives,
and his vice-president, current Nicaraguan President Enrique Bolaños,
were all involved in stealing CINN’s project plans and using them to set
up rival SIT-Global. CINN investors claim the new group then offered to
dissolve the rival bid in exchange for US$ 10 million.
Alemán and Bolaños have refused to comment on the subject.
The legal cases are pending.
Agrarian Reform Loses Ground
to Private Property Purchases
Meanwhile, Alemán has purchased choice plots of land not only
on the Pacific Coast but all over the country–potentially positioning
himself to profit from anticipated transportation corridor developments,
whether or not they are currently outlined in PPP.
In 1979, when the Sandinista National Liberation Front ousted the Somoza
family after its half-century of dictatorship, the ruling family and its
closest associates controlled approximately one-fifth of the nation’s
arable land. Two years later, the Sandinista government passed the Agrarian
Reform Act and began to expropriate land holdings larger than 850 acres
in the Pacific region and larger than 1,700 acres in the central region
of the country.
More than half of the nation’s rural poor gained access to land under
the program, making it one of the most sweeping reform efforts ever in
Latin America. But in the dozen years since the Sandinistas were voted
out of power, Nicaragua’s land tenure situation has undergone serious
Alemán’s total assets were estimated at just $26,000 when he became
mayor of Managua in 1990. After becoming president in January 1997 he
amassed more than $50 million worth of real estate. Now his land holdings
stretch across the country, from the Pacific to the Atlantic, and south
nearly to the Costa Rican border.
Though he has acknowledged publicly that he has done some land-buying,
Alemán has refused to disclose the source of the money.
Public Receives Information
Equally unavailable to the public is information on how the proposed
corridors will affect local communities.
Francisco d’Escoto, CINN’s Managua representative, claims "no one"
lives at the company’s proposed Pacific port location of Pie de Gigante.
Yet the beachfront village is large enough to have two schools, as well
as several restaurants and bars. Most of its 500 residents have been there
all their lives.
Although the people of Pie de Gigante often see outsiders in expensive
trucks checking out the area, the visitors never speak with locals, they
Many here, and along the rest of the projected rail routes, are trying
to gather information about the dry canal plans and are beginning to raise
their voices in the matter.
Chief among them is Germán Larios, an environmental activist who
lives in the municipality of Nandaime, 25 miles north of Pie de Gigante.
He volunteers to spread the news, working on the issue since the summer
of 2001 with an 11-year-old national network called Cambie, or "Environmental
On his second visit to Pie de Gigante, one late afternoon in June, he
found typical confusion surrounding the development. Larios struck up
a conversation with the first people he saw, as they sat on their front
porch. Yes, they had heard about the dry canal, they told him. Yes, they
knew the plans called for a huge port on their beach.
One man knew more than the rest, having seen television reports in the
departmental capital of Rivas that did not reach people in Pie de Gigante.
He explained correctly that the train would move at 60 miles per hour,
and the project would cost a total of $2.6 billion to build. But he mixed
together both CINN and SIT-Global schemes: The train would go "from
Monkey Point to here, from here to Corinto," Alvaro Sánchez
told the group.
"It would be good, the progress," the man added. "But
the people from here, they wouldn’t have anywhere to go," he protested.
Larios clarified the routes and pointed out that public participation
could alter the plans.
Mounting Opposition Fuels
One week after Larios’ visit to Pie de Gigante, several of the residents
he had spoken with attended a Cambie workshop about the dry canal, held
in a nearby coastal village. Soon after that, they organized their own
meeting in Pie de Gigante. Eighty people showed up, including a representative
from nearly every household. Shortly after this meeting, a newspaper headline
in El Nuevo Diario , one of Nicaragua’s two main newspapers, announced,
"Dry canal shakes up citizens of Rivas."
Then a public hearing was held, and Pie de Gigante residents pled their
case, one of the first times they had inserted themselves in the debate.
Since then, the citizen-based movement against the canal has grown much
larger and stronger.
With public outcry, lawsuits and allegations of corruption in Alemán’s
activities, on top of general difficulty in attracting international investment
to Nicaragua, the future of the dry canal proposals appears less certain.
Alemán Also Posed to
Profit from Plan for Southern Water Canal
But Alemán, for one, seems to have hedged his bets. Just in case
his big-dollar dry-canal dreams don’t materialize, he has also been buying
up land in southern Nicaragua.
One of his larger purchases was El Raudal ranch, a 1,700-plus-acre property
abutting the San Juan River. That ranch happens to face the river rapids
at the town of El Castillo. In 1999, a company called EcoCanal won a concession
to transform the San Juan River into a low-draft barge canal, connecting
the city of Granada with the Atlantic Ocean. Since then, the company has
been working on environmental impact and other studies required before
construction can begin.
EcoCanal’s business plan explains, "the second set of rapids at
El Castillo occurs 62 kilometers downstream from the lake of Nicaragua.
Here a lock with a chamber will be built…on the north side of the river
opposite the town of El Castillo." That is to say, on El Raudal ranch.
Wendy Call lives and writes in the Isthmus of Tehuantepec, in southern
Mexico, as a Fellow of the Institute of Current World Affairs. Before
moving to Mexico two years ago, she worked for 10 years for social change
organizations in Seattle and Boston. She can be reached at < firstname.lastname@example.org >.
Centro de Investigaciones Económicas y Políticas de Acción Comunitaria (Center for Economic and Political Research for Community Action) (Spanish with some English)
Global Exchange’s special section about the Plan Puebla Panama (English with some Spanish)
UCIZONI (Association of Indigenous Communities in the Northern Zone of the Isthmus) and the Grupo de Trabajo Colectivo del Istmo (Collective Working Group of the Isthmus) (Spanish only, use Internet Explorer only with this page)
EZLN (Spanish only)
Mexican government Plan Puebla Panama information (Spanish)
Inter-American Development Bank (English and Spanish)
From this homepage for Yahoo in Mexico, click on "noticias" and then you can do a search for media coverage in Spanish of the PPP. Generally at least one article a day is posted to this site. (Spanish only)
Articles and article collections
A general article about the Plan Puebla Panama, "Plan Puebla-Panama: Done Deal or Emerging Flashpoint? As Mexico’s Resource-Land Grab Wins Financial Backing, Public Opposition Grows."
A special issue of borderlines , the magazine of the Interhemispheric Resource Center (in New Mexico– http://www.irc-online.org/ ) about the Plan Puebla Panama. (English)
Dr. Ana Esther Ceceña, "El Dictamen del Senado, a favor del Plan Puebla Panamá y no de los derechos indígenas."
Sally Burch, "The Mesoamerican Isthmus: Globalization, Ecology and Security." (English)
An article from the Texas Observer about the impacts of the PPP on the communities that live in the region. (English)
A brief, basic article from British journal The Ecologist , about the PPP. (English)
A very good collection of articles about the impacts of "free" trade on Mexico. Scroll half-way down the page for an article by Carlos Beas Torres, director of UCIZONI (see above), about the history of industrial development programs in Mexico’s Isthmus of Tehuantepec. (Articles download in Acrobat format, in English and Spanish)
Done Deal or Emerging Flashpoint?" | Americas Program, April 9, 2002
in Mexico" | Americas Program, October 2001
to Spread Maquiladoras South" | borderlines UPDATER , August
"PPP Plays into
Washington’s Hand for Latin America" | borderlines UPDATER ,
August 7, 2001
Published by the Americas
Program at the Interhemispheric Resource Center (IRC). ©2002. All
Wendy Call, "Nicaraguan Transportation Corridor Developers Hitch
Hopes to Plan Puebla-Panama (PPP)," Americas Program Investigative
Article (Silver City, NM: Interhemispheric Resource Center, April 10,