HKND Group is Building the Nicaragua Grand Canal
Nicaraguan Government grants Canal Concession to HKND
When the Nicaraguan government grants a concession this year to a Chinese company, HK Nicaragua Canal Development Investment Co. Ltd., to build a shipping canal between the Pacific and Atlantic oceans, a half-century wait will be over. The new canal will be wider and deeper than the Panama Canal. For businesses that use the Panama Canal at this time, they will have an alternative starting approximately around 2020, which is the proposed operational date. However, the proposal to build this canal is not without local protests and international skepticism.
Criticisms and Skepticism Locally & Internationally
The main thrust of the criticisms has been that the Master Concession Agreement signed between HK Nicaragua Canal Development Investment Co. Ltd (HKND) and Nicaragua is that Nicaragua has sold its sovereignty for 100 years to a private, foreign-owned company. In June 2012, the Nicaragua’s National Assembly approved a bill to grant a 50-year concession to the newly Hong Kong Nicaragua Canal Development Investment Co (HKND) to build the canal across the Latin American country. The concession would be renewable for another 50 years, thus the 100 years of lost sovereignty.
In addition, locals say that the agreement was negotiated without transparency or national consensus. The Chinese company shoulders no liabilities, whereas the reserves of the Nicaraguan National Bank serve as collateral on the part of Nicaragua. The harshest complaints center around the judicial, labor, and financial rights, which they feel have been ceded to HKND.
A Bit of History
However, in July 2012 the Nicaraguan parliament passed Law 800. This law is about the Nicaragua Interoceanic Canal legislation and the establishment of the Interoceanic Canal Committee. It provides a solid legal foundation for the construction of the Interoceanic Canal. A memorandum of understanding between the Authority of the Grand Inter-Ocean Canal of Nicaragua, known as the “Authority,” and the HKND Group, established the project’s scope. A month later in October 2012, both parties signed the Deed of Cooperation, explaining in more granular terms the project details. The HKND group’s responsibilities included planning, designing, constructing, and upon completion, operating and managing the Nicaragua Grand Canal and any other related infrastructure projects. Other related projects would also include ports, an international airport, a free trade zone, and other infrastructure development projects as the need arose.
With control of the canal and the ability to operate cellphone and internet services in Nicaragua, it is understandable why critics say that even the sovereignty of the country, has been ceded to Wang Jing, the chairman and chief executive officer of HKND and chairman and largest shareholder of Xinwei Telecom, a Chinese telecom company which won a deal in 2012 to operate cellphone and internet services in Nicaragua.
The following year, in June 2013, the Nicaraguan parliament gave its approval for the government to sign the Master Concession Agreement with the HKND Group. The HKND Group now had the sole rights to plan, design, construct, and thereafter to operate and manage the Nicaragua Grand Canal and other related projects.
Nicaragua’s government claims that the project will lift the Western hemisphere's second poorest country out of poverty, which may be true, but what is the cost to the environment and how are the people whose lands and homes are on the projected route going to be compensated.
HKND (Hong Kong Nicaragua Canal Development) Group is a private infrastructure development firm that is based in Hong Kong. It is registered in the Cayman Islands.
HK Nicaragua Canal Development Investment Co., Limited - Basic information
- Registration Numberï¼š1788941
- Registration Dateï¼š20 August 2012
- Company Nameï¼šHK Nicaragua Canal Development Investment Co., Limited
- Founder of information: HK Nicaragua Canal Development Investment Co., Limited established in Hong Kong on 20 August 2012.
Wang Jing: The Man behind the Canal's Development
The Chinese billionaire Wang Jing owns or controls a number of businesses including by HK Nicaragua Canal Development Investment. He is the chairman and CEO of HKND, which in turn is owned by HK Nicaragua Canal Development Investment. The development of the Nicaragua canal, estimated to cost between 40 to 50 billion dollars, is the first project for HKND.
Wang believes that by 2030 not only will the addressable shipping trade have grown by 240%, but also that the actual ships will be significantly larger. Although the Panama Canal is undergoing a five billion dollar expansion, Wang feels that that is has become imperative to develop and construct a wider and deeper interoceanic canal to support the larger weight loads, thus generating greater efficiency for shippers. He went on to say in an interview in SinoShio magazine “the Nicaragua Canal and Development Project represents a tremendous opportunity to transform global trade and ignite a new era of growth and opportunity for Nicaragua, its people, and the entire region.”
To answer the critics, a PR release from the HKND Group says the following principles will guide our actions as we undertake this important project:
- Integrity — openness, transparency and honesty
- Respect for local people with sensitivity to social and environmental impact by serving the best interests of the region and protecting the natural ecosystems and wildlife of Nicaragua;
- Economic benefit and value creation across all stakeholder groups including generating local training and job growth while promoting local and regional economic development.
HKND Group is working with a global team of experts with deep experience and capabilities. They want to ensure international participation and involvement in every aspect of the project, from financing, and construction, to logistics. They state there will be competitive tendering processes for qualified Nicaraguan, regional and international firms, consistent with international best practices for fairness and openness for each phase of work. As of 2014 there were a number of other partners already on board.
Work started officially on December 22, 2014.