Nicaragua announces start of China-backed canal to rival Panama

[FaujHistorian]

Nicaragua announces start of China-backed canal to rival Panama

By Gabriel Stargardter

MANAGUA Mon Dec 22, 2014 9:24pm EST


MANAGUA (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.

The canal could also give China a major foothold in Central America, a region 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.

Flanked by Nicaraguan President Daniel Ortega, who is a former Marxist guerrilla leader, Wang Jing said the tender for the preliminary design of the project would be offered by the end of the first quarter of 2015, by which time an environmental impact study would also be finished.

By the end of the third quarter, excavation work would begin, with a tender for the design of the locks due by the end of the year, he said.

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.

"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," said Greg Miller at consultancy IHS Maritime.

In the Americas, only Haiti is poorer than Nicaragua.

Earlier, Nicaraguan presidential spokesman Paul Oquist said feasibility studies, including a McKinsey report that experts say will define interest in financing the canal, 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 is seeking international funding and rejected the idea that China will bankroll the project worth roughly four times Nicaraguan gross domestic product.


(Editing by Grant McCool and Lisa Shumaker)

That's an awesome project

 

[Providence]

Can we have a link to the feasibility study for the project ? The Tendering and shebang ?

 

[TaiShang]

Can we have a link to the feasibility study for the project ? The Tendering and shebang ?

You need to send an e-mail to the consortium and ask. I am not sure they are willing to share the feasibility study as it costs money and information is not freely distributed. Just check Jstor or Ebsco websites. That kills me.

 

[Providence]

You need to send an e-mail to the consortium and ask. I am not sure they are willing to share the feasibility study as it costs money and information is not freely distributed. Just check Jstor or Ebsco websites. That kills me.

No feasibility study is something which nicaragua should make their citizens available before asking them to move. It is meant to stay in public domain.

As for me, I don't think the project will add mAybe a marginal value over panama with no concrete assessment as to what extent it would lead to employment generation while the downside is, that place will become a criminal cesspool and full of drug smugglers (like what is happening in panama). The downsides are a certainty.

 

[Galad]

And of course "spontaneous protests " already have the the proper coverage in "truth" loving Western press .Such an expectable move.It changes nothing of course-channel will be build on time.

 

[Nan Yang]

Found this website with a lot of information regarding the Nicaragua canal.

Significance - HKND Group Nicaragua Canal Global Trade Project

For the transportation of bulk cargoes, economies of scale should have long ago dictated that ships should be as large as possible for bulk carriers and super tankers. However, they could not pass through Panama Canal. This limits the growth of raw materials from the Americas to Asian markets. For example, the Brazilian mining giant Vale, has planned for the construction of 35 Valemax ships of 400,000 dwt (dead weight tones) (and which cannot as yet call on China ports). These ships will not go through Suez Canal or Panama Canal. Vale accepted longer shipping distances to achieve vessel economies of scale. Due to the higher quality and quantity of Brazilian iron ore, this trade is expected to grow substantially in future.

Equally, the dimension constraints of the Panama Canal restrict the transportation of rapidly growing crude oil production in the Caribbean and Gulf of Mexico and the transportation of new light grade crude oil from the oil fields in the heart land of America. The heavy grade crude oil produced in Venezuela is not best suited to the refinery requirements in Asia. America is currently developing sources of new light grade crude oil to suit the refinery requirements in Asia. The rapidly increasing shale oil production will soon render America a net energy exporter. Therefore allowing super tankers a high efficiency route to the Asian refineries will generate enormous commercial interest from North American and Asian markets. In particular China is likely to be a primary importer for this American light grade crude oil.

 

[Kiss_of_the_Dragon]

Only the first part of this video spoke about Nicaragua canal, interesting discussion for those who understand Chinese.

 

[TaiShang]

Work Begins on Historic Nicaragua Canal

In two ceremonies on Dec. 22 marking the start of work on the first auxiliary projects for construction of Nicaragua's "Great Interoceanic Canal," Nicaraguan President Daniel Ortega, Vice President Omar Halleslevens, and HKND company president Wang Jing situated the historic significance of what has just begun.

Work began on Monday in Rivas, on the Pacific coast, building the access roads for the Britos port where the heavy excavating machinery will be unloaded.

"The future of all humanity will benefit from this canal," said HKND head Wang Jing at the ceremonies at the Rivas site, which Vice President Omar Hallesleven and he addressed. "The people of Nicaragua are contributing to bringing about their own happiness, and dedicating this contribution to all humanity. This canal will deepen commerce between the east and west, and cultural interchange will be enriched," he said. "We are making history."

"With this great canal, Nicaragua aspires to move 5% of the world's sea-going trade, which will bring great economic benefits" to Nicaragua, Vice President Hallesleven noted. The canal will not only transform Nicaragua's history and geography, but also its economy, in a sustainable way, which is what we Nicaraguans need.

In his address to ceremonies held later in the capital, Managua, attended by his full cabinet, members of the Nicaraguan private sector, and others, including Wang Jing, President Ortega pointed to the overall changes underway in Ibero-America and the Caribbean as a whole, as what has made it possible to finally realize this long-desired dream of Nicaragua. The speeches were translated consecutively into and out of Chinese.

"Today we are a region where we defend the principle of sovereignty, where we hold up the region as a region of peace, and therefore it is not an accident that this project is being carried out when in our America we have succeeded in making this great historic leap towards integration and unity of all our peoples," Ortega said. "And I can say to our Latin American brothers, that this project belongs to Nicaragua, to our America, and the world."

Through this "the meeting of two peoples, the glorious people of China with the glorious Nicaraguan people," Nicaragua can totally eliminate poverty. Nicaraguans can find work on this project, and we don't want Nicaraguans going to other countries to find work, Ortega declared.

For two years, British and Wall Street assets have put out the line that the canal is a cuento chino, a fairy-tale, which will never happen, will never get financing, isn't viable, etc. With that lie disintegrating, the British Crown's ecologist apparatus has gone into high gear, as have the Project Democracy "color revolution"-types, manipulating the fears of the peasants and small farmers who live along the canal route. The appropriately-named U.S. news site, Daily Beast went so far as to suggest armed revolution might be triggered to stop the canal.

The day the canal work started, the British activated their assets in Colombia, in an attempt to mobilize that country to use its historic border dispute with Nicaragua over the San Andres archeapelego in the Caribbean against the canal. Well-known British asset and former Foreign Minister Noemi Sanin, together with former Vice Justice Minister Miguel Ceballos, announced they had filed a complaint with UNESCO, charging that the Nicaragua canal threatens the "Seaflower Biosphere Reserve" which encompasses the disputed islands. Sanin and Ceballos demanded that Colombian President Juan Manuel Santos join them in attacking the canal as a threat to Colombian sovereignty.

The Seaflower Biosphere Reserve, administered by UNESCO and the Colombian government, is as preposterous as the Sanin gambit: the reserve encompasses not only 350,000 sq. km. of sea and included islands, but also the people which live within it!

 

[TaiShang]

Nicaragua Canal project seen having geopolitical, not just trade implications
By Guillermo Háskel

Herald Staff

If it materializes, it will siphon off traffic from the Panama Canal, and China would have a stronger geopolitical influence in Nicaragua, a diplomatic source says

If a proposed US$40 billion Chinese group project to build a channel to link the Atlantic and the Pacific oceans through Nicaragua materializes, it will have not only enormous implications for global trade but also huge geopolitical consequences, according to international relations experts talking to the Herald.

"In the same way that the Panama Canal was the US canal in the XX Century, a Nicaragua Canal would eventually be the Chinese Canal in the XXI Century," Juan Gabriel Tokatlian, a lecturer with the private-run Di Tella University said.

"Shipping development, and the need for supertankers and safe routes have revived the Nicaraguan possibility first considered in the XIX Century. Increasing trade is the reason behind the Panama Canal current expansion.

However, international trade trends point to a superlative preeminence of the Pacific and all this led Nicaragua to re-float this idea which has found strong Chinese support."

A diplomatic source who talked on condition of anonymity said: "It is yet to be seen if actually the project goes ahead, who funds it, and if global trade increases or not, because there is strong protectionist trend.

“However, the Chinese think for the long run, even for centuries ahead, and some time trade will have to recover,” the diplomatic source added.

"If the Nicaragua Canal is finally built, it will siphon off traffic from the Panama Canal and the Chinese will likely have a more relevant geopolitical influence in Nicaragua that, so to speak, is not a country fully integrated into the Western system.

"Additionally, anything detaching the Southern Hemisphere from the Northern one will not necessarily benefit the South.”

“When the Panama Canal was inaugurated in 1914, the Cape Horn route – which gave Argentina and Chile a strategic relevance – was lost, and when the Suez Channel was built, the trade around the Cape of Good Hope also lost steam.

“Argentina has the longest distance to North America, to Europe and to Asia trade centres. It has to recover its historical hemispheric unity vocation. We have never been too enthusiastic about UNASUR, because it leaves the US, Canada, Mexico and the Caribbean out. Let’s recall that as Caribbean countries were gaining independence, they became members of the Organization of American States at the behest of Argentina. Even Canada became an OAS member on the back of Argentina’s initiative. There are other countries not so interested in that Northern vertical view.”

Under the Peronist government of President Cristina Fernández de Kirchner and that of her predecessor and late husband Néstor Kirchner, Argentina became a close ally of Venezuela, Bolivia, Ecuador and other left-leaning states.

Asked whether the US has been caught off guard by the Hong Kong-based HKND group headed by Chinese lawyer Wang Jing which is leading the Nicaragua Canal project, Tokatlian said that the Panama Canal lost a lot of geopolitical relevance for Washington as the US west coast doesn’t need to go through Panama to trade with Asia and the east coast doesn´t need it either to trade with Europe.

“Actually, the Panama Canal has been more relevant for several other countries to reach the Pacific and for some Asian countries to reach Europe and the Atlantic coast of Latin America. “Today, the US may be somewhat concerned geopolitically by a Chinese presence in the area, but not because either canal may prevail over the other.”

‘Mysterious businessman’

Wang, 41, has been widely described as a “mysterious” businessman. He himself has admitted that many don’t believe his allegations that the Chinese government is not supporting his group on the sly.

Chinese President Xi Jinping and other current and former Beijing leaders have visited Wang’s wireless communication technologies firm.

Tokatlian, asked whether he thought that funds for the Nicaragua Canal project may come from Beijing, replied: “I would not doubt it.”

He recalled that that a group from Taiwan, and to much more extent a Hong Kong-based Chinese group, participated in the Panama Canal expansion, adding that the US Congress held many hearings early this century about how to limit the Chinese presence in the Panama Canal expansion and that there were allegations that the Hong-Kong based group participating in the new Panama Canal was actually channeling funds not just from the Chinese government, but specifically from the Chinese Army.

“It is not possible to assert that the Chinese Army may be also participating in the Nicaragua Canal project. But China’s geopolitical interests are increasingly evident,” Tokatlian said.

Asked for his view, political pundit Rosendo Fraga said: “No Chinese group makes such a move without the interest or the support of the Chinese government.”

However, Jorge Castro, a Strategic Planning Secretary under the neo-conservative Peronist administration of Carlos Menem (1989-1999), said that there was no mystery at all. “China is the axis of the world economy. The Chinese government is not behind the Nicaragua Canal project. There is nothing hidden.”

Besides, he added, “China is the leading strategic ally of the US. Presidents Xi Jinpin and Barack Obama signed an accord in California in June 2013.”

The anonymous diplomatic source said that Chinese reserves are denominated in dollars and in US bond and hence “for China, there is the need that the US doesn’t go fully bankrupt. Besides, trade deals continue to be conducted in dollars and there is nothing that may lead to think that it could be replaced by another currency despite the dollar’s devaluation.”