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Tuesday, October 17, 2017

Nicaraguan delegation takes China tour to punt its cross-country ditch

Posted to Far East Maritime (by on October 29, 2013

Just when you thought the grand trans-Central America canal boondoggle was gone and forgotten, up it pops again.

There was no fanfare involved, just a low-profile, under the radar tour. The Hong Kong Nicaragua Canal Development Investment (HKND) outfit hosted a delegation of 21 politicians, academics and businessmen on a junket around Beijing, Wuhan, Xuzhou and Hong Kong.

If you recall when the story first surfaced last year, the HKND was set up to handle the estimated US$40 billion project that plans to connect the Pacific Ocean with the Caribbean by digging a trench across Nicaragua.

The project was “strictly commercial”, a HKND person insisted in a South China Morning Post report this week. However, leading the delegation was none other than the son of Nicaraguan president Daniel Ortega, so it is going to be hard to sell that non-governmental line.

Added to that is the fact that HKND has hired engineers from state-owned China Railway Construction Corporation to plan and design the canal, which stretches even further the claim that it will be a project funded by the private sector.

Profligate, unnecessary, unwanted, ROI spanning generations – the investment has state-owned enterprise written all over it, and if I was running the show that's the trough I would be looking to snuffle in.  

Here’s a brief recap of the plan. Wang Jing, chairman of HKND, is betting at least US$40 billion of other people's money on US shale gas production that he believes will require transportation in tankers too big to use the Panama Canal situated not far to the south.

There are big questions about the long-term sustainability of shale gas mining in the US, so the entire business plan of this project is wobbly from the start. We would be happy to throw your money at it, but ours will remain safely under the pillow or in the hands of a responsible barman.

HKND has won a concession to design, build and manage the canal that will be considerably longer than the 77-km Panama Canal with some serious geographical obstacles to overcome before the diggers meet in the middle.

There are many sceptics, both inside and outside Nicaragua. It has been called, among other things, a grand money laundering exercise, a scam and technically impossible. The term "boondoggle" should also be included at every mention of the project. What surprises us most, however, is that the story finds its way into the front pages of newspapers when it is quite clearly meant to be carried in the entertainment section.

Further muddying the waters is that in 1990, Nicaragua switched its diplomatic recognition from China to Taiwan. The delegation it sent to China is the first of its type since Nicaragua became one of the 23 countries that recognize Taipei instead of Beijing, and waddayaknow, it comes with its hands out.

Nicaragua’s foreign minister has already irritated Taipei by calling it China-Taiwan, which seems like a precursor to its shifting allegiance back to Beijing to help grease the wheels of commerce.

This political repositioning may be on the cards, but what is more certain is that when it comes to the Nicaraguan canal, it has about as much chance of success as the "Change Diapers While You Drive" app.

 

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