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

 

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 Number：1788941
• Registration Date：20 August 2012
• Company Name：HK 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.

 

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Understanding HKent.biz and the Nicaragua Grand Canal Project

Introduction

HKent.biz is a dedicated platform that sheds light on the ambitious Nicaragua Grand Canal project, spearheaded by the Hong Kong Nicaragua Canal Development Investment Co. Ltd. (HKND). This project, if realized, aims to create a significant interoceanic canal across Nicaragua, rivaling the Panama Canal in both size and functionality. The venture has garnered international attention, stirring a mix of optimism and controversy. This article aims to provide a comprehensive overview of HKent.biz, the Nicaragua Grand Canal project, and the multifaceted issues surrounding it, including environmental, economic, social, and political aspects.

Background and History

The HKND Group, established in 2012, received a 50-year concession from the Nicaraguan government in 2013 to design, build, and manage the Nicaragua Canal, with the option to renew the concession for another 50 years. The envisioned canal spans approximately 170 miles, connecting the Pacific and Atlantic Oceans. It also includes supplementary infrastructure projects such as ports, an airport, and a free trade zone. This project was conceived to accommodate larger ships and alleviate the congestion of the Panama Canal.

Wang Jing, the chairman and CEO of HKND, projected that the canal would significantly enhance global trade and provide substantial economic benefits to Nicaragua. Despite these grand ambitions, the project has been fraught with skepticism due to environmental concerns, lack of transparency, and the colossal scale of the undertaking.

Environmental and Social Concerns

Environmental impact has been a major point of contention regarding the Nicaragua Canal. The proposed route threatens to devastate large areas of rainforest, wetlands, and reserves, home to numerous endangered species. Critics argue that the project could cause irreparable damage to ecosystems, contaminate Lake Nicaragua (the country's primary source of drinking water), and displace indigenous communities.

An independent environmental assessment was not initially conducted, leading to further distrust among local populations and environmentalists. Environmental Resources Management, a British consultancy firm, eventually undertook the feasibility and environmental studies. However, skepticism about the project's viability and transparency persists.

The canal threatens to destroy nearly one million acres of rainforest and wetlands. The Bosawas Biosphere Reserve and the Indio Maiz Biological Reserve, which are home to endangered species such as jaguars and harpy eagles, lie near the proposed canal route. Additionally, the Cerro Silva Nature Reserve, known for its biodiversity, is directly in the path of the planned canal. The project could also impact sea turtle nesting beaches on both coasts and disrupt coral reefs and mangroves that protect inland Nicaragua from tropical storms.

Indigenous communities, including the Rama, Garifuna, Mayangna, Miskitu, and Ulwa, depend on the areas slated for the canal. There is no evidence that their rights have been adequately considered or that provisions have been made to compensate for disruptions to their lives.

Economic and Political Implications

Economically, the canal promises to transform Nicaragua by creating jobs, stimulating local industries, and attracting foreign investment. The Nicaraguan government has promoted the canal as a means to lift the country out of poverty and enhance its global standing. However, the financial stability of HKND and its ability to complete such a massive project have been questioned, particularly given Wang Jing's other failed ventures and the lack of progress in other large-scale projects he has undertaken.

Politically, the canal project has been criticized for undermining Nicaragua's sovereignty. The concession granted to HKND effectively gives significant control of the country's resources and infrastructure to a foreign entity for a century. This aspect of the deal has sparked protests and legal challenges from various local and international groups, who view it as a neo-colonial maneuver benefiting a few at the expense of many.

Press and Media Coverage

The Nicaragua Canal project has received extensive media coverage due to its global significance and the controversies surrounding it. Publications like the Smithsonian Magazine, South China Morning Post, and the Council on Hemispheric Affairs (COHA) have highlighted various facets of the project, from its environmental and social impacts to its economic and political implications.

The Smithsonian Magazine detailed the environmental devastation the canal could cause, highlighting concerns about deforestation, water contamination, and the displacement of wildlife and indigenous communities. The South China Morning Post focused on the political and economic ramifications, noting the project's potential benefits and the significant challenges it faces. COHA provided a thorough analysis of the domestic considerations and challenges, emphasizing the need for transparency and adherence to legal and ethical standards.

Audience and Public Perception

The audience for HKent.biz includes stakeholders such as local Nicaraguans, environmentalists, global investors, and policy analysts. Public perception of the project is deeply divided. While some see it as a potential economic boon, others view it as an environmental disaster and a threat to national sovereignty. The lack of transparency and the slow progress have only fueled these divisions, making the canal project one of the most debated infrastructure projects in recent history.

Current Status and Future Prospects

As of the latest updates, the Nicaragua Canal project has faced significant delays and obstacles. Financial challenges, legal disputes, and growing environmental concerns have stalled progress. Additionally, the political climate in Nicaragua and changing global economic conditions have cast further doubt on the project's feasibility. Despite initial groundbreaking ceremonies and some preliminary work, substantial construction has yet to commence, leaving the future of the canal uncertain.

 

HKent.biz serves as a testament to the ambitious vision of the Nicaragua Grand Canal project, a venture that has the potential to reshape global trade routes and bring economic transformation to Nicaragua. However, the project is fraught with challenges that must be addressed comprehensively. Environmental sustainability, social justice, financial viability, and political transparency are critical factors that will determine whether this grand vision can become a reality. As it stands, the Nicaragua Canal remains a symbol of both immense possibility and profound controversy, reflecting the complexities of modern infrastructure development in a globalized world.