A lot of folks have questioned all along the viability to the latest Nicaragua canal play by Chinese billionaire Wang Jing, There have been questions about environmental concerns; how the $40 to $70 billion price tag was arrived at – kind of a big range; what, if any, infrastructure Nicaragua offered; and where the money would come from. Most importantly the deal was executed by Nicaraguan President Daniel Ortega and lacks the support of the Nicaraguan people.
The Chinese government has denied, then hem and hawed about their participation, while Russia has eagerly promised help. However in the Chinese stock market melt-down Jing lost an estimated 85% of his $10.2 billion fortune and is now a mere pauper supposedly with only $1.1 billion in wealth.
The world’s biggest canal project – a $50bn interoceanic canal through Nicaragua – has been delayed, following an environmental report and a collapse in the fortunes of the Chinese businessman behind the company that planned to build it.
The Hong Kong Nicaragua Development (HKND) Group announced on Wednesday that it would be another year before the start of major works on the proposed rival to the Panama canal.
The company said the “design of the canal is being fine tuned”, in accordance with recommendations contained in an environmental impact assessment.
Preliminary operations on ports and access roads started 11 months ago. Since then the slow pace of work on the canal has been attributed to the wait for the environmental report. The report was approved earlier this month, but instead of ramping up work the company said in a statement: “The construction of locks and the big excavations will start toward the end of 2016.”
The mega-project – which would be the world’s biggest earth-moving operation – has proved controversial since it was agreed by Nicaraguan president Daniel Ortega and Wang Jing, the Chinese telecoms mogul who subsequently registered HKND.
Nicaraguan officials say the investment will boost the economy and raise living standards in the second-poorest nation in Latin America. But conservationists have warned that the 178-mile canal will damage Lake Nicaragua – the biggest freshwater source in Central America – and infringe upon protected areas and indigenous territory.
Environmental Resources Management – the UK-based company that drew up the impact assessment for HKND – concluded that the project would “have significant environmental and social impacts” but said these could be minimised.
HKND officials have said the route may be adjusted and other changes made to the original plan in order to offset such concerns and ensure the project is in compliance with international standards, so it can win support from the World Bank and other global institutions.
Such claims remain contentious. But company officials say the project will go ahead, with the construction of a port at Brito early next year.
Other concerns focus on the financing of the project, which remains obscure. HKND says it plans to build a global consortium with investors from many countries. Until now, however, most of the seed money has reportedly come from Wang’s personal fortune.
That is not what it was. Until June, Wang was worth more than $10bn, putting him among the world’s 200 richest people. But a collapse in Chinese stock prices earlier this year slashed his fortune at one point by nearly 85% to $1.1bn.
His shareholdings have since partially recovered, but are still more than a third below levels at the start of the year.
Wang appears determined to push ahead with the canal project. If, however, he were to eventually abandon it, he would be in good company.
In the past 500 years, more than 70 canal proposals have been mooted and later dropped, by visionaries ranging from the first Spanish conquistadores to US president Theodore Roosevelt. [THE GUARDIAN]