San José, Costa Rica, since 1956

Honduran court rules against privately run ‘model cities’ project

TEGUCIGALPA – The Honduran Supreme Court ruled against a plan to build a series of “model cities,” each with their own independent tax and justice systems, similar to those in Hong Kong.

The 15-judge panel voted 13-2 to reject the proposals, claiming that legislation permitting the creation of specialized development zones was outside the jurisdiction of Honduran law, and the project would unconstitutionally involve the creation of a state within the state.

Supporters of the project said that the court’s decision was a massive blow to Honduras’ ongoing effort to attract more international investment.

Originally, the model cites initiative was authorized by the Honduran Congress in January 2011 during a controversy over control of regional territory. A U.S.-based investment group was expected to put up some $15 million to start the project.

The cities were to be located at Puerto Castilla on the Caribbean coast. The idea was that the cities would have their own government, judicial system and police forces.

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