From Nicaragua canal to Ukraine ports, developer is on a roll
Wang Jing, the Chinese billionaire behind the plan to build a waterway across Nicaragua to rival the Panama Canal, is on an international infrastructure binge.
While Ukraine digs itself deeper into political crisis, Beijing Interoceanic Canal Investment Management (BICIM) has been quietly getting on with business.
The Wang-controlled BICIM has agreed to invest US$10 billion in the construction of a port and economic zone in Sevastopol, Ukraine’s second largest port.
Wang and newly embattled Ukrainian president Viktor Yanukovych met vice-premier Ma Kai in Beijing last week after which he explained to reporters that the first US$3 billion phase of the project would include an economic development zone with high-tech logistics and industrial parks.
Phase two will need another US$7 billion for the construction of a refinery, liquefied natural gas production plant, an airport and a shipyard. Partnering with BICIM in the project is a Ukranian company called Kievgidroinvest.
BICIM is the parent company of HKND Group, an infrastructure developer that won the concession to build the Nicaragua canal. The experience it will gain in building the canal appears to be one of the reasons BICIM was awarded the contract by the Ukrainian government.
The Sevastopol deep water port will improve China’s shipping access to Europe, cutting thousands of kilometres off the Asia- Europe journey. BICIM will hold a larger share than its Ukrainian partner but Wang declined to reveal details of the other investors, only to say that financial support had been secured.
Wang has also declined to reveal the global investors that he claims have been secured to pour money into the Nicaragua canal project. So far the route for the 286-kilometre canal has been fixed.
A legal challenge to stop the project was dismissed by the Nicaragua Supreme Court yesterday after it found the canal construction would not violate the country’s constitution. Work is scheduled to begin by the end of next year and take six years to complete
However, Wang said the investment required for the project has been increased from US$10 billion to US$50 billion, which should be raising red flags among investors. Infrastructure budgets often need to be revised upwards, although 500 percent is a bit rude.
But then it’s close enough for government work.