Proposed routes for the Nicaraguan Canal. Map courtesy Hoftra.edu
By Gabriel Stargardter
MANAGUA, Dec 22 (Reuters) – Nicaragua on Monday announced the start of work on a $50 billion shipping canal, an infrastructure project backed by China that aims to rival Panama’s waterway and revitalize the economy of the second-poorest country in the Americas.
The groundbreaking was largely symbolic, as work began on a road designed to accommodate machinery needed to build a port for the canal on the Central American country’s Pacific coast.
Nicaragua’s government says the proposed 172-mile (278-km) canal, due to be operational by around 2020, would raise annual economic growth to more than 10 percent. In the Americas, only Haiti is poorer.
The canal could also give China a foothold in Central America, long dominated by the United States, which completed the Panama Canal a century ago.
Construction of the new waterway will be run by Hong Kong-based HK Nicaragua Canal Development Investment Co Ltd (HKND Group), which is controlled by Wang Jing, a little-known Chinese telecom mogul well-connected to China’s political elite.
More than a year since it was first announced, the project faces widespread skepticism, with questions still open about who will provide financing, how seriously it will affect Lake Nicaragua and how much land will be expropriated for it.
“Shipping would love for this to happen, but it’s a luxury not a necessity,” said Greg Miller at consultancy IHS Maritime. “Given how much this will cost, it’s hard to take a stance on whether it will happen or not until there is a signal whether that money is available or not.”
Presidential spokesman Paul Oquist said the feasibility studies, including a McKinsey report that experts say will define interest in financing the project, had been delayed by changes to the route and would be ready by April.
Oquist said the “core financing” would come from public and private Chinese money, without giving a percentage.
But he added that Nicaragua wants the canal to receive international funding and rejected the idea that China’s government will bankroll the project, which is worth roughly four times the GDP of Nicaragua. (Editing by Grant McCool)
(c) 2014 Thomson Reuters, All Rights Reserved
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 109,108 members that receive our newsletter.
Have a news tip? Let us know.
A Norwegian shipping company on Friday rejected an accusation from Dmitry Medvedev, deputy chairman of Russia's Security Council, that it refused to rescue sailors from a sinking Russian cargo ship in the Mediterranean Sea.
Israel struck multiple targets in Yemen it said were controlled by Houthis, the last of the Iran-backed groups still fully engaged in the regional war that began 14 months ago.
China said on Monday it had provided information and documents for an open investigation into the severing of two Baltic Sea undersea cables, though it and Sweden disagreed over how transparent Beijing had been in the case.
Maritime and offshore news trusted by our 109,108 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
