Beijing Not Involved in Nicaragua Canal, Executive Says

[Judi Lynn]

Beijing Not Involved in Nicaragua Canal, Executive Says
June 25, 2013, 11:47 a.m. ET

BEIJING—The Chinese executive at the center of an ambitious $40 billion plan to build a Nicaraguan canal to rival Panama's sought on Tuesday to quell skepticism surrounding the project, saying the Chinese government wasn't involved and that he would approach major banks about funding it.

In a news conference on Tuesday, telecommunications executive Wang Jing also hinted at more details of the source of his own personal fortunes, saying much of it stems from gold-mining holdings in Southeast Asia as well as unspecified investments in sports and aviation. Mr. Wang said he would release further details in coming months.

"We will apply international, transparent standard to it, which can be accepted by investors world-wide," he said.

Mr. Wang is chairman and chief executive of HK Nicaragua Canal Development Investment Co., of which he said he owns 100%. Earlier this month, Nicaraguan lawmakers gave the Hong Kong-based company the right to build a canal connecting the Caribbean Sea with the Pacific Ocean in an effort to boost economic growth.

He is also chairman and a major shareholder of Beijing-based Xinwei Telecom Enterprise Group, which makes telecommunications and surveillance equipment. Mr. Wang on Tuesday said he owned close to 40% of the company, though he added Xinwei wasn't connected to the Nicaraguan canal project. In a September filing with Beijing authorities, the company said Mr. Wang held a 38% stake. Based on a second filing that same month, that would value his stake at $1.13 billion, though that value is based on a separate transaction with a state-controlled company that may not fully reflect market dynamics.

More:
http://online.wsj.com/article/SB10001424127887323998604578567333829410570.html

[Judi Lynn]

1. New canal a lifeline for energy

New canal a lifeline for energy
Updated: 2013-06-26 02:25
By WEI TIAN and XING ZHIGANG ( China Daily)

Analysts warn of risks for massive Nicaragua project worth $40b

The Chinese businessman behind an ambitious plan to build a waterway across Nicaragua to rival the Panama Canal stressed on Tuesday that the new canal will serve as a lifeline for global energy trade when completed in 2020.

Wang Jing, 40, a Beijing native, said at a news conference that the $40 billion project would break ground in late 2014 and complete construction within six years.

Hong Kong-based HKND Group, an infrastructure development company wholly owned by Wang, will be responsible for financing the project before construction begins. But Wang said the project would also introduce global investors, and he has also been in touch with energy companies.

The new canal is expected to generate annual revenue of at least $5.5 billion, according to an initial estimate, because of the increasing Chinese demand for coal and oil in the region and the shift of US energy policy to more exports, Wang said.

Although the Panama Canal has invested $5.3 billion in an expansion project since 2007, Wang said it couldn't meet the growing maritime trade between East and West.

"The Nicaragua canal will be broader, deeper and will allow larger vessels to pass," Wang said, adding that the canal is designed for 400,000-ton-class vessels, compared with the Panama Canal, which only allows vessels with capacities below 150,000 tons.

More:
http://www.chinadaily.com.cn/china/2013-06/26/content_16658635.htm

[Socialistlemur]

2. Lets recap what we know....

The guy who got the contract is one of these new Chinese capitalists who emerged from nowhere as china abandoned communism. He seems to have excellent contacts. His company is engaged in "telecoms and surveillance". Has a contract to provide cell phone service in Nicaragua. Thus far he looks like he has connections to a Chinese state intelligence service but they also let him be a "normal Chinese billionaire". Similar to the contractors like Halliburton, Black Water and the consultants who work for the NSA.

Then he shows up signing a contract and getting a concession for a huge canal...a contract awarded via direct negotiations, without transparency and which uses very irregular procedures for this type of deal. So far it smells of corruption or a secret Nicaragua-China deal.

The man's comments show he's completely ignorant about this type of project. For example there is no bank (except maybe a Chinese bank where environmental issues can be ignored) which will lend money to such a project unless there are strict environmental impact statements and reviews performed. I would expect this to take at least two to three years. And in a self respecting country other than one ruled by a dictatorship one expects to have a period for local community comments.

So it seems to me this gentleman, coming as he does from a dictatorship where neither the environment nor workers' rights are respected, thinks he will start digging his canal so he can move coal and other freight from the Atlantic basin to China. Imagine that, he wants to move coal in huge freighters to China. I assume Greeenpeace will have something to say about this.