The Chinese company selected to dig a $50bn trans-oceanic canal across Nicaragua plans to start building a fuel terminal and wharf on the Pacific side of the route this coming August, after more than a year of delays to the controversial scheme.
Hong Kong-based HKND Group said the terminal and wharf will be part of a new port facility needed to import machinery for the "major works" of the canal, such as dredging, the group’s executive vice president, Pang Kwok Wai, told Bloomberg last week.
In an emailed response to questions Pang also sought to address scepticism concerning the financial viability of the 276-km canal, which is intended to rival the 102-year-old Panama Canal.
The project’s financing does not depend on the state of the stock market in China– Pang Kwok Wai, executive vice president, HKND Group
HKND has so far refused to say where the estimated $50bn would come from to build the canal, but Pang said financing could come from debt, equity sales and even a potential stock market launch.
"Many businessmen from Latin America, China and Europe have come to talk with us," Pang told Bloomberg.
Volatility in China’s stock market raised fresh doubts over the canal last year when the billionaire behind the scheme, telecoms tycoon Wang Jing, HKND’s chairman and CEO, had nearly 85% of his fortune wiped out by plummeting share prices.
But Pang told Bloomberg: "The project’s financing does not depend on the state of the stock market in China. It is an international project. Funding will come from many countries and many investment sectors."
Nicaragua granted HKND the concession to build and operate the canal for 50 years in June 2013. A ceremony marking the start of construction was held in December 2014, but major works have yet to begin.
In September last year the government pushed the project’s start back to this year to allow for extra environmental studies.
A map of one of the proposed canal routes (HKND Group)
The scheme is controversial. Scientists in Nicaragua and around the world have opposed the plans on environmental grounds, and last month Amnesty International slammed what it called Nicaragua’s "reckless handling" of the gigantic civil engineering scheme.
As many as 30,000 people could be physically or economically displaced by the canal, according to HKND’s own estimate, as reported in the scheme’s Economic and Social Impact Assessment.
According to Bloomberg, however, a study published by the Nicaraguan government said that 81% of Nicaraguans support the canal, which promoters say will transform the poor country’s economy.
Top photograph: HKND Group’s executive vice president Pang Kwok Wai, right, and HKND’s chief project advisor Bill Wild during a public consultation on the canal’s environmental impact assessment in Managua, September 2015 (HKND Group)