China can do nothing with its huge forex reserves except to buy US-treasuries Really? Nicaragua breaks ground on $50bn canal - From the FT Grand designs: Wang Jing, centre, inaugurates the project on Monday flanked by Nicaraguan officials and HKND staff Nicaragua and Chinese billionaire Wang Jing have formally launched work on a $50bn canal across the Central American nation — a megaproject that has raised international questions about whether it will ever be finished, who is really funding it and why. A carefully orchestrated party was held in Managua’s main square, hailing President Daniel Ortega’s “great triumph” in realising Nicaragua’s “century-old dream”, and thronged with supporters waving banners declaring “God bless the canal”, as Mr Wang and other dignitaries gathered in the former presidential palace. “We are not destroyers, we are constructors,” the telecoms magnate declared in a lengthy speech carried live on state television. Mr Ortega sought to assuage fears that awarding the 100-year contract to build the canal, two ports, locks and other works to Mr Wang’s Hong Kong Nicaragua Development Group was signing sovereignty over to China. “The Chinese have not come to Nicaragua with occupying forces,” the veteran revolutionary leader said. “They have come to share their resources, their capabilities, their development, their technology, their science. This is what they have come to share with the people of Nicaragua.” The waterway, which will compete with the Panama Canal for traffic between the Pacific and Atlantic oceans, has been criticised as a monumentally costly folly. Opponents have warned that it will wreck flora and fauna, contaminate the pristine Lake Nicaragua through which the canal will run, and evict thousands of people from their land without fair compensation. Mr Wang dismissed such suggestions and insisted instead it would open up a “21st-century maritime silk route . . . [and] lead the Nicaraguan people to a more brilliant and happier future . . . it will change the model of world trade”. He added: “There is no turning back”. A route across Nicaragua, whose lush greenery and stunning natural riches contrast with its status as one of the region’s poorest states, had been considered when the US took over rights to the Panama Canal a century ago, but was dismissed as too difficult. The HKND plan, known formally as “Nicaragua’s Grand Interoceanic Canal”, is to be three times as long as the Panama waterway but capable of handling larger ships. BOX - Nicaragua’s canal by numbers: Take a poor, central American nation. Add a giant investment from a little-known Chinese billionaire. The result is the biggest public works project in the history of the world, according to its backers. Here is a quick run-down of the planned Chinese-financed Nicaraguan canal in numbers. Nicaragua’s GDP: $11bn Cost of planned canal: $50bn Start of work on access roads: December 2012 Expected inauguration: 2019 Jobs planned to be created: 50,000 in construction, 200,000 in operational phase Length: 275.5km (compared with the 81.3km Panama Canal and the 193.3km Suez Canal) Capacity: 8,800 ships a year Depth: up to 30m Width: 230m-520m Number of routes studied: six (five were eliminated because of threats to turtles, coral and other biodiversity) Number of ports and locks: Two ports, Brito and Punta Aguila. Two locks, Brito and Camilo. Mr Wang, a telecoms businessman with no known record in such an ambitious public works project, promised jobs and prosperity, as well as fair market compensation for landowners. Mr Ortega said the canal “has the capacity to completely eradicate extreme poverty” in his nation. The canal, however, promises to divide the nation in more ways than one. “I thought at first it would be good for development, and we’re in such a mess here,” said Miguel Reyes, a fast-food seller in the central square of Granada, a colourful colonial town popular with tourists on the shores of the lake. “But now I’m not sure. If it brings development, great, but if it contaminates, then I don’t agree with it.” Carlos Reyes, an environmental consultant who was having his shoes shined in the square, countered that no project could have zero impact, but the canal’s planned route had been chosen and five others eliminated in order to do the least harm. “We will be a country in the eyes of the world with this project,” he added. Implicitly acknowledging that there had been criticism and questions about whether Beijing was funding the project, Mr Wang vowed transparency in tenders to be held for the design of the project, locks and ancillary works. “There is no trickery here, no lies,” he said. “We will not invade your happy and tranquil life,” he told Nicaraguans. HKND would, he said, complete an environmental impact study by the end of the first quarter next year. A tender for the canal’s design and locks at the east and western ends would be held in the fourth quarter, he added. The company, however, has declined to spell out who its backers are, telling the Financial Times only that the project has drawn “wide capital attention. The financing is under way. We will publish the progress in proper time”. Additional reporting by Gu Yu in Beijing
Posted on: Tue, 23 Dec 2014 07:36:51 +0000
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