(posted June 13, 3:05 p.m.)- Less than one hour after the Sandinista-controlled National Assembly voted to ratify Nicaragua’s 50-year canal contract to upstart Chinese firm HKND Group, the newly awarded Chinese concessionaire released a pre-prepared statement thanking Nicaragua for the opportunity to develop the project.
“We are honored to be given the opportunity to develop this transformational project that has the potential to bring tremendous, long-term economic benefits to Nicaragua, to the region, and to international shippers and consumers around the world,” said HKND Group Chairman Wang Jing in a company press release that was published in three languages moments after the vote. “We are committed to building and operating the Nicaragua Canal and Development Project in accordance with international best practices. It is very early in a long process, and we have a lot of work ahead, but we want to be clear that we intend this to be a world-class effort that creates economic opportunity, serves the global trade community, and also protects the local environment, heritage, and culture of Nicaragua.”
“We are confident that this project will be an economic success for Nicaragua, for the region, for trading partners around the globe, and for HKND Group,” Wang stressed.
The concession law, passed by the Sandinista supermajority Thursday afternoon after a heated debate, grants HKND Group exclusive rights for the planning, design, construction, operation, and management of the Nicaragua Canal and other related projects, including deep-water ports, airports, an oil pipeline, and free trade zones.
While very few details are known about HKND—the company is only several months old, and is registered in the Cayman Islands—the Chinese firm has started its public-relations offensive with a high-powered PR firm in Washington, D.C.
“We have enlisted a global team of world-class experts to support HKND’s feasibility studies on multiple fronts, including outreach over time to a range of stakeholders with an interest in this new project,” says former Bolivian politician and HKND spokesman Ronald MacLean-Abaroa. “Moreover, a leading sustainability consultancy will conduct an independent environmental and social impact assessment. By definition, this is a truly global initiative, and we are committed to operating in a transparent and open manner with participation of entities from around the world, according to high standards of environmental and social responsibility.”
HKND Group claims that ERM, “one of the world’s leading sustainability consultancies,” is in the process of independently assessing the environmental and social impact of various routes under consideration. ERM did not answer Nicaragua Dispatch’s request for information this week.
HKND also says that China Railway Construction Corp. has been engaged to conduct the initial technical feasibility assessment and that McKinsey & Company is providing HKND with fact-based research and analysis.
“Initial findings from HKND’s commercial analysis indicate that the combined impact of growth in East-West trade and in ship sizes could provide a compelling argument for the construction of a second canal, substantially larger than the expanded Panama Canal, across Central America,” the company said in its release.
HKND says it thinks in 16 years the volume of trade addressable by the Nicaragua Canal will have grown by 240%.
“The fuel savings provided by the deployment of larger ships on the trade routes served by the Nicaragua Canal could be substantial. For example, going from Shanghai to Baltimore, the new route is 4,000 kilometers shorter than the Suez Canal route, and 7,500 kilometers shorter than around Cape of Good Hope. At current fuel prices, for an average size containership, this represents roundtrip savings of US$500,000 and US$1.0MM respectively,” the company claims.
“There is an enormous amount of work to be done, and we will provide future updates on our progress as we address key milestones ahead,” says spokesman MacLean-Abaroa.