Ten years after the inauguration of construction works for a canal aimed at connecting the Atlantic and Pacific oceans in Nicaragua, the government of President Daniel Ortega has withdrawn the concession to build the canal from Chinese company HKND.
The legal framework for the mega project will be changed, the National Assembly of the Central American country said on Wednesday.
The reasons for the reform and the cancellation of the contract were not initially given. The Ministry of Transport will now take over the administration of the canal authority, it said.
Construction work on the planned 278-kilometre-long canal began symbolically in 2014, but never really progressed.
In addition to the waterway, a railway line, an oil pipeline, two ports and an airport were planned.
According to the government's plans, the $50 billion waterway was to rival the Panama Canal.
Around 30,000 people would have had to leave their homes for the huge construction project. Conservationists warned of devastating environmental damage.
Critics had doubted from the outset that the Hong Kong consortium HKND, which is quite inexperienced in infrastructure projects, would even be capable of carrying out the project. The company was not only supposed to build the canal, but also operate it for up to 100 years.