Route 4 chosen for canal; definitive studies expected for October

On July 7, at a press conference in a Managua hotel organized by the Advisory Commission for the Development of the Grand Canal chaired by Manuel Coronel, a representative of the HKND Group announced that, based on preliminary studies, the best from among the six routes originally proposed for the shipping canal across Nicaragua was Route Four. That route would begin at the mouth of the Brito River south of the city of Rivas, pass through Lake Nicaragua and end at the mouth of the Punta Gorda River in the South Caribbean Autonomous Region. The route would be 278 kilometers long of which 105 kilometers would be across Lake Nicaragua. According to HKND engineer Dong Yunsong, two sets of locks would be built, one at the Brito River and the other near the mouth of the Punta Gorda River. In the afternoon, the commission and HKND representatives met with business leaders, trade unionists, and environmentalists.

Then, at an evening meeting on the same day, Wang Jing, president of the HKND Group, told a gathering of 300 students at the National Engineering University that the feasibility studies and the environmental impact study for Route 4 would be completed in October. Through an interpreter, Jing said,  We are not going to begin the project without the complete scientific and feasibility studies. HKND is here to build a country together with the Nicaraguan family and we are not here to destroy it.  He went on to say,  We have full confidence in the plan to protect the environment and we hope that each sector of society, each one of you, will analyze, criticize, and comment on our plan for environmental protection. We are confident that we can present a satisfactory scientific environmental protection plan and begin the project at the end of this year.  He called on university students to  find your place in this project  noting that it would  need talent on a grand scale.  He said that the canal offered the possibility for the country to leave poverty behind and promised that Nicaragua s sovereignty would be protected. He admitted that there have been many criticisms of the projects which he said he has welcomed, noting,  Only confronting them can we develop this project in the best manner.

HKND representatives said that the project will include two deep water ports, a free trade zone at Brito, a tourist complex and airport in the Department of Rivas, and a series of highways. An electricity generating plant will need to be built along with plants to produce cement and steel. Morten Nygart of Global 2020, who is in charge of connecting European companies to the project, said that US$900 million was being spent on the various feasibility and impact studies.  They are taking these studies seriously,  he said, adding that the companies  have done colossal work.  Among the companies working on the studies are the British firm ERM (environment), New York-based McKinsey & Company (finances), MEC Mining of Australia (excavation), SBE Belgium (locks), and US-based Kirkland Ellis, LLP (legal). The canal as proposed would accommodate the largest ships, those that are too big to use the expanded Panama Canal, including the new Triple E ships of the Maersk Line.

Nygart said that fears of salt water entering the lake are unfounded for a canal of this type, noting that the waters are separated and the locks will work in a way similar to those of the Panama Canal which recycle the same water three times. But he said that the increase in traffic through the lake will have an environmental impact and this must be taken into account since it could have grave consequences for the flora and fauna of the lake. At a global level, Nygart said the environmental impact would be strongly positive since the canal would save the largest ships five to seven thousand miles on each journey from Asia to Atlantic ports because they would not have to travel around South America s Cape Horn, resulting in a massive reduction in carbon emissions.

Sandinista National Assembly Deputy Edwin Castro explained why the studies were delayed saying that the route had to be chosen before the definitive environmental and other feasibility studies could be carried out. Elmer Cisneros, president of the National Autonomous University in Managua, said that his university was in conversations with universities in Italy and Canada about how best to prepare students for the professions that will be needed in building and managing the canal.

Geographer Jaime Incer Barquero, who has served as an environmental advisor to President Daniel Ortega, expressed the fear that the canal could put at risk the potable water of Lake Nicaragua for future generations while Jorge Huete, president of the National Academy of Science, said that the canal could destroy 400,000 hectares of forest.

Economist Edmundo Jarquin said,  For a country to move out of poverty there are no miracles. This is a giant project and its impact on the national economy will depend on how it is done.  (El Nuevo Diario, July 7, 8; La Prensa, July 7; Informe Pastran, July 7)

LAB adds:

HKND, incorporated in the Cayman Islands, is fully owned by Hong Kong-based HK Nicaragua Canal Development Investment. Its chair is Wang Jing, the president of Xinwei Telecom Enterprise Group, a telco group with interests in Nicaragua. The company’s ‘Spokesman’ is Bolivian mining expert Robert McLean-Abaroa, four times mayor of La Paz, who has a Masters from Harvard and has worked at the World Bank. He was candidate for President of Bolivia for the ADN party founded by former dictator Hugo Banzer. An anti-corruption expert he is a founder and council member of Transparency International.

HKND’s own website describes the various partners involved in the project:

“Currently, HKND has entrusted China Railway Construction Corporation,  (hereafter ‘CRCC’) to undertake technical feasibility studies, McKinsey & Company to provide fact based data and analysis, and Environmental Resource Management (hereafter ‘ERM’) to undertake social and environmental evaluations and impact assessments.

“At the same time, HKND has invited XCMG, SBE from Belgium and MEC Mining from Australia to help on the project. The participation of these companies will provide valuable expertise on construction standards, scale, and route selection while also providing effective support on construction equipment and techniques. The expertise of these companies provides enormous capacity support and profit assurance on canal operations, considerably increasing the project’s ability to manage risk.

“China Railway SIYUAN Survey and Design Group, is the lead design contractor, and is also in charge of the road sub-project design. Changjiang Institute of Survey, Planning, Design and Research has responsibility for the design of the canal project.  The CCCC Second Harbor Consultants has responsibility for the design of the ports’ sub-project.  The Civil Aviation Engineering Consulting Company of China has responsibility for the design of the airport sub-project. The Shenzhen LAY-OUT Planning Consultants has responsibility for the design of the free trade zone and holiday resort sub-projects.”

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