From lofty ideas to concrete plans. Western companies will present feasibility studies for the Nicaragua Canal before the end of June. The government of Nicaragua is in Europe to attract investors.
BY TOMAS KRISTIANSEN
Published 08.05.14 at 09:11
The plan to build an alternative to the Panama Canal through Nicaragua is changing from a wistful idea, doubted by many, to an actual project that could soon become a reality.
Today ShippingWatch can report that several of the biggest Western infrastructure companies are currently working on feasibility studies aimed at evaluating the central elements necessary in order to realize the colossal project.
American McKinsey is looking at the finances of the project.
Australian mining company MEC Mining is reviewing the scope of the digging work through the country's jungle, while British ERM is handling the environmental consequences, and consulting engineers SBE, of Belgium, will present a proposal for the dimensions of the massive water locks necessary to realize the project.
The project has been surrounded by a lot mystique, and not least skepticism from the maritime sector and critique from environmental activists.
And Panama's government and the Panama Canal Authority has used every opportunity to shed doubt on the project that, according to plan, will be able to handle the biggest ships, Post-Panamax - ships that cannot sail through the Panama Canal, not even when the current expansion process is completed.
As such, the new canal between the Pacific and the Caribbean will be able to handle Maersk Line's new Triple-E ships along with the even bigger ships that competing carriers are planning.
The Financial Times reports that there are currently some 4,000 people working around the world solely on preparing the material the government of Nicaragua plans to present during June.
So far, the Nicaragua Canal, which will be three times as long as the Panama Canal, has been personified by Chinese investor Wang Jing, who is fairly unknown in the West.
Ostensibly backed by the Chinese government, Wang Jing has managed to secure the 50-year concession on the Canal, which estimates say will cost around USD 40 billion to build, going by 2014-prices. The feasibility studies alone, set to be ready by next month, will approach USD one billion in costs, according to estimates.
Wang Jing has so far denied all ties to the Chinese government, but according to the presentation material for investors and business people - which ShippingWatch is in possession of - Chinese state-controlled companies such as CACC, container carrier COSCO, and container manufacturer CIMC are part of the companies featured on Hong Kong-listed HKND's list of suppliers.
Wang Jing heads the HKND Group.
Construction on Panama-competitor to begin in 2014
Alongside the process of completing the feasibility studies, Nicaragua's government is currently traveling the world as part of the efforts to make companies interested in contributing to the project as well as securing investors.
As such, president Daniel Ortega's right-hand man, Paul Oquist, recently visited European capitals like Copenhagen, where he - in addition to visiting the Ministry of Foreign Affairs - also met with various business stakeholders and organisations.