The China Civil Engineering Construction Corporation (CCECC), accused of corruption, bribery, falsification of documents, and labor violations in projects worldwide, is set to build the Man River (río del Hombre) Dam in Honduras’ Amarateca, near Tegucigalpa, Central American investigative journalism platform Expediente Público reported.
The process behind this work, however, is shrouded in questions. The content of the letter of understanding, signed on September 12, 2024, by the Chinese state-owned company and Tegucigalpa’s Mayor Jorge Aldana, remains a mystery. Although Aldana mentioned an estimated value of $550 million for the project during the public signing agreement, he did not provide details on the source of financing.
The project, according to a study by the Inter-American Development Bank, would consists of diverting the waters of the Man River to Tegucigalpa, through a 21.1-kilometer pipeline and two pumping stations. The reservoir is expected to have a capacity of 90 to 104 cubic hectometers for a flow of 2.12 cubic meters per second.
This and nine other infrastructure projects are part of an emergency decree approved in February 2024, which promotes new works and improvements in the water network and treatment plants, prioritizing investments. In addition, according to the decree, the government of Honduras will be able to carry out direct contracting without going through Congress.
“It is likely that this tender is linked to corruption. The United States has denounced this type of practice as one of the biggest obstacles to development in Latin America,” Euclides Tapia, professor of International Relations at the University of Panama, told Diálogo. “Many politicians prioritize personal benefit, handing over the regional economy to China.”
Checkbook diplomacy
The relationship between Honduras and China has evolved rapidly since March 2023, when Tegucigalpa broke off relations with Taiwan and recognized the “One China” Policy, British news agency BBC reported. This shift marked a key point in Beijing’s “checkbook diplomacy” strategy to woo countries through financial aid and loans, The New York Times reported.
“This strategy extends beyond the mere pursuit of immediate gains,” Tapia said. “Even projects with apparent low profitability are part of China’s long-term plan to consolidate its presence in the region and reshape the financial landscape, to the detriment of other established economies.”
History of disputes
“Chinese companies obtaining concessions in Latin America has been surrounded by controversies, sparking questions about the clarity of the processes and compliance with regulations,” Tapia said.
In April 2023, Peru’s Contracting Tribunal sanctioned CCECC for falsifying documents and presenting inaccurate information to win a public tender for a road project. The 37-month sanction prohibits the company from participating in contracting processes with the Peruvian government until July 1, 2026.
On October 2023, Nigeria’s Federal High Court indicted CCECC for various violations including bribery and money laundering. According to the indictment, in 2014, CCECC transferred more than $4 billion to various Nigerian officials. Nigerian workers have also denounced the company for “inhumane treatment,” “lack of safety” leading to death, and “hostile environment.”
Similar situations have been reported in other countries such as Botswana, where in 2012 representatives of this Chinese company were accused of trying to bribe an official to win the construction of a school, British news site Africa Confidential reported.
The extent of these practices even led the World Bank to blacklist CCECC and five other Chinese companies for fraud and corruption.
“In this scenario, the main avenue of action available is public accusation, both at the national level, so that the population understands the actions of its government, and at the international level, to make these negative practices visible,” Tapia said. “However, Honduras’ growing dependence on China comes at a high cost.”
According to Tapia, this dependence opens the door to multiple risks, including “threats to national security and cybersecurity, due to China’s consistent practice of incorporating surveillance elements in its investment projects, without sector distinction.”
China in Honduras
Meanwhile, Honduras is moving forward in the formalization of the Free Trade Agreement with China. However, on December 27, 2024, Dante Mossi, former president of the Central American Bank for Economic Integration (CABEI), warned Honduran newspaper El Tiempo about the risks of this type of agreement.
“In Central America, of the four large countries that have relations with China, it has been very difficult for them to reach these Free Trade Agreements, let alone achieve good results,” Mossi said, adding that countries such as Costa Rica face a “terrible deficit of almost 10 times the goods they import compared to those they export to that country.”
As such, Mossi recommended that Honduras seek specialized advice from international organizations such as the World Bank or CABEI, to avoid repeating the same mistakes.
Meanwhile, China continues to consolidate its influence in key sectors in the country. According to Infobae, Honduras’ military base Soto Cano Air Base, home of Joint Task Force Bravo, is a strategic enclave that could be a crucial role in China’s future logistics and commercial plans.
“The possibility that Honduras would allow the installation of a Chinese base by granting territory to an extra-continental country not only compromises its sovereignty but represents a direct challenge to […] the geopolitical balance in the continent,” Tapia said. “The problem is that China is penetrating everything.”
