By Michael McDonald
(Bloomberg) — Hong-Kong based HKND Group, contracted to build a $50 billion canal across Nicaragua, expects to start construction on a fuel terminal and a ship wharf as soon as August on the Pacific coast after a year of delays.
The works will be part of a port facility for importing machinery needed for “major works” such as dredging, HKND Group Vice President KW Pang said in an e-mailed response to questions, without specifying when digging would begin. Financing for the 170-mile (274-kilometer) long canal could come from debt and equity sales and a potential IPO, he said.
“Many businessmen from Latin America, China and Europe have come to talk with us,” Pang said. “The project’s financing does not depend on the state of the stock market in China. It is an international project. Funding will come from many countries and many investment sectors.”
The viability of the project, which would be 300 miles from the century-old Panama Canal, has been questioned by shipping experts and engineers since Nicaraguan President Daniel Ortega first announced the plans and the country’s legislature awarded the contract without accepting competing bids. The company estimates that some 27,000 people would have to be re-located and said they will offer “fair market value” for properties.
Anti-canal activists on Tuesday gathered 20,000 signatures in a bid to repeal the law that green-lighted the project and will present their petition to Nicaragua’s congress. A survey by Cid Gallup and published in newspaper Confidencial in January showed that 34 percent of respondents considered the canal to be “pure propaganda,” while a separate study published by the government said that 81 percent of Nicaraguans support the canal.
“There will always be some people who have concerns,” Pang said. “We are, however, convinced that the canal represents a large step towards progress, economic growth and social welfare for Nicaragua and the region.”
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