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Meet the Chinese tycoon behind Nicaragua’s grand canal ambitions

May 6th, 2014 (InsideCostaRica.com) In a May 1st interview with Reuters, Chinese entrepreneur Wang Jing discussed why he’s putting his fortune behind a controversial $50 billion “mega canal” across Nicaragua that would dwarf the Panama Canal.

 

In the interview, Wang promised that work on the canal would begin late this year, dispelling rumors that the project might have been delayed until 2015.

 

“There were some media reports saying the canal project had been postponed to 2015.  We thought it was really strange because we never had any plans to postpone the project.  Nor did we encounter any problems that would force us to do so,” Wang said.

 

“We talked to the official the reports mentioned and he told us very clearly that he had never said anything like that.  Either the media got it wrong or someone started a rumor.  So President Ortega and I made a joint statement confirming work on the canal would indeed start at the end of 2014.”

 

Wang also seems confident that financing for the $50 billion project won’t be a problem.  Wang said there were a number of ways in which he and his company will be able to raise capital, adding that the project “doesn’t require $50 billion in cash.”

 

“A large portion of the $50 billion is actually in materials, including cement and steel.  We have signed contracts with a well-known steelworks and a cement plant to jointly build facilities in Nicaragua.  What these plants produce will be used to build the canal,” Wang said, adding that the arrangement would provide tax breaks and allow his group to control steel and cement prices.

 

Wang said that so far he has financed the project completely with his own cash, estimating he has invested about $100 million so far.

 

In the interview, Wang stressed that environmental concerns were being taken into account.

 

Many have expressed their concern that the proposed route – which crosses through Lake Nicaragua, an important source of fresh water in the country – could cause environmental damage.  Wang said he already has some 100 workers in Nicaragua, many working on feasibility and environmental issues, and that scientific models indicate there will be no adverse affects to the lake.

 

Environmentalists have warned that the project could spark an environmental disaster that threatens drinking water supplies and fragile ecosystems.

 

With an area of 8,264 square kilometers, the lake is the largest in Central America.

 

Wang also denied any involvement in the project on the part of the Chinese government.

 

The government of Costa Rica said in June of last year that it supports Nicaragua’s effort to build the canal so long as the route wouldn’t pose any risk to its territory.

 

Nicaragua’s National Assembly voted 61-25 to approve a 50-year concession to Wang for the project last year.

 

Under the concession, his company would operate the canal for 50 years and then have an option to extend that period for another half-century.

 

Wang says he is determined to see the project through to completion, which reports indicate will take about six years.

 

“I will keep investing until the project succeeds,” he told Reuters.

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  • NorthendFool

    Still stealing neighbors land for project??

    • Canamjay

      a smart neighbor would learn to share in the benefits which will be huge… perhaps the new gov can break with tradition (and Uncle S) and benefit from peaceful and collaborative relations. After all.. isn’t China CR’s new BFF?

  • Ben

    Sounds like a good project. I hope they can make it happen. Lots of jobs will be created with this project. Looks like Costa Rica is headed in Bad direction and now Nicaragua could be the next booming place. Also heard HP is laying off loads of people in Costa Rica my sister and friends where told they have 3 week left of work at HP. CR is dead now for investment and now Nicaragua shows some hope.

    • roberto

      Is the ex-presidenta still heading for Canada to meet up with her husband and son?

    • Luis Diego Campos

      Hope with Ortega? better say Ortegas hope is to own the canal…Thanks but no thanks Ill rather stay safe in CR.

  • Ken Morris

    Good summary piece on an important issue, Tim.

    I think the real problems with this project involve transparency, which interestingly Wang mentioned repeatedly in the interview, as if to proactively counter this criticism. His though is a private company (headquartered I understand in the Cayman Islands, not China) while Ortega is nothing but secretive about money. No one really knows how the money will work (although this may be a given with any massive project like this).

    But critics are mistaken to focus on either the Chinese or the environmental angle. Yes, Wang is ethnically Chinese, but it’s basically misplaced racism to assume that therefore the Chinese government is somehow involved. Yes too, there will likely be environmental issues. You can’t understake a project this massive without risking and likely causing environmental damage. But to focus on these is to miss the elephant in the room: Lots of money is being sloshed arond without much accountabilty.

    Mostly though, I suspect that Ben is right. Ten or 20 years from now, it looks likely that there will be a reversal in the respective fortunes of Nicaragua and Costa Rica. Nicaragua will be the one having the immigration problems as poor Ticos flock there. I mean, Ortega is pulling off a huge project, even by world historical standards.

    The sad part is how staunchly Costa Rica has refused to participate. This is after all indirectly what the Rio San Juan controversy was about. Ortega thinks development big, and is world class in his initiatives. Costa Rica thinks small and provincial. It had every opportunity to get in on this project at its inception, but instead whined and even refused to talk. Ortega handed Costa Rica a golden opportunity to get in on this project, but Costa Rica preferred to play the victim. Costa Rica will therefore pay the price in spades. Nicaragua is poised to kick economic ass while Costa Rica will be left with some partially protected wetlands where next to nobody lives or visits.

    Long term, this will go down as the biggest failure of the Chinchilla adminsitation. Costa Rica had the chance to get in on a truly historic economic opportunity, but blew it. It will be left trying to woo the next Intel and resort developer while Nicaragua soars without foreign dependency.

    Costa Rica lost, and time will show the magnitude of the loss.

  • disgusted

    The lake supplies most of all the drinking water for Nicaragua. I wonder how this is going to effect the quality of the water.Aah but that is not so important , Right? . But hey go for it . This would give some healthy competition.