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A Chinese Man, a $50 Billion Plan and a Canal to Reshape Nicaragua
- kinnth 12y agoIs the environmental risk really serious or is the poverty going to cause people to damage the environment anyway? Perhaps the money would bring more resources to protect the wildlife?
- benologist 12y agoI would think the environmental strain will be significantly higher with the construction and eventually ships - this is a country where most people don't own cars and shared modes of transport are used by everyone.
- msellout 12y agoIt'll certainly destroy a few if not hundreds or thousands of species. Transoceanic ships will bring strange species, displacing natives. The environmental studies will, among other things, try to model which species will be able to fend off the new competition, but ecologies can be chaotic (in the mathematical sense).
- brianbreslin 12y agoThe main source for the country is lake Nicaragua (which has bull sharks btw!) and they would be dredging this too. This would cause massive amounts of silt to cloud the water which would kill a lot of the fish/fauna. Not to mention there are going to be a lot of corners cut on this since it's Latin America and bribes will get paid (I'm Panamanian, I know how this stuff works).
- andreasklinger 12y agoI am a bit confused by the article - because this is not mentioned at all - I am no history buff so happy to be corrected here: But haven't there been wars to avoid that Nicaragua gets an own canal (afair even supported by the USA and later by the CIA. Eg their Civil War or before that the US occupation [1]) Back then mainly to avoid having such important routes in the hands of pro-communist states, later to keep their financial interest in Panama in check. Wasn't the last state the the USA got the exclusive right to build such canal - basically just to allow nobody to do it. How come that this isn't mentioned at all in the article? (As said before all cited from vague history memory. Happy to get a correction/update on that.) [1] https://en.wikipedia.org/wiki/United_States_occupation_of_Nicaragua https://en.wikipedia.org/wiki/United_States_occupation_of_Ni...
- pmorici 12y agoThey hint at US opposition in the article but they don't come out with all the history behind it... "Some opponents of the canal worry that the financing will actually come from the Chinese government itself, which Richard Feinberg, a fellow at the Brookings Institution, describes as "the Chinese planting their flag right in the heart of the Western Hemisphere."" NPR is a news outlet funded in part by the US government it isn't particularly surprising that they aren't going to delve into history that makes the US look bad.
- andreasklinger 12y agoGood to know. I always assumed that the NPR is one of the reputable media in the states.
- jmadsen 12y agoI don't believe that's accurate: http://en.wikipedia.org/wiki/NPR#Funding http://en.wikipedia.org/wiki/NPR#Funding Perhaps you were thinking of Voice of America, or the way it used to be funded 30-40 years ago?
- dewarrn1 12y agoNo. NPR derives about 5% of their funding from US, federal, state, and local governments. Source: http://www.npr.org/about-npr/178660742/public-radio-finances http://www.npr.org/about-npr/178660742/public-radio-finances NPR certainly has its own biases in reporting, but it is not solely funded by the US government and it is not a US government mouthpiece.
- pmorici 12y ago""what happens if the diggers dig too deep and disturb the active volcanoes," says Bol" Is digging disturbing volcanoes really a serious concern?
- benologist 12y agoNicaragua still has active and erupting volcanos and a lot of earthquakes.
- pmorici 12y agoI don't doubt it but could human scale construction trigger an eruption that would destroy the country?
- benologist 12y agoPoor / developing countries don't have the infrastructure or standards to avoid disasters so I'm sure 'we' could indirectly cause a fire or a landslide or something that overwhelms their emergency services. Nicaragua's capital has been destroyed twice in the last century by situations like that.
- gus_massa 12y agoYes. But can you activate a volcano with a (big) digger? Or this danger is only FUD.
- bjelkeman-again 12y agoI have studied geology and believe that to be FUD.
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- lotsofmangos 12y ago
- jccooper 12y agoDunno. That's an awfully high capital cost to compete with the Panama Canal--which will have a lot lower cost to expand its capacity to match a competitor's features (mostly extra size) if they turn out to be in high demand. The current Panama Canal expansion project is a $5B operation. No doubt another expansion (the "gargantuan locks project" or something) would cost more, but certainly not in the $50B ballpark. Panama seems to make $1B/yr on the canal, even restricted as it is, so I can see where they're coming from if you believe in a strong and growing unmet demand (for very large ships). But with the existing competition you really have to believe in a level of traffic that will saturate the Panama Canal in any reasonable expanded configuration. And probably the Suez as well. And I'd be very worried about the Northwest Passage.
- vacri 12y agoThe article suggests that the money is actually being supplied by the Chinese government - $50B is nothing to establish a strong political foothold in the area. Or even provide a rationale for military bases to defend such expensive infrastructure.
- adventured 12y agoThe headline number certainly jumps out, but $50b spaced over, say, ten years is definitely no particular problem for China (or any major economic power for that matter). The Panama Canal cost between $7b and $10b in today's dollar ($375m originally), and of course thousands died in the process of construction. Between higher labor and material costs, making this much larger, nicer, and avoiding thousands dying, a $40b or $50b cost wouldn't be surprising.
- Htsthbjig 12y agoIt has nothing to do with economics. It is about strategy. US is the US of America because of the Panama channel, without it transporting something from coast to coast is so expensive. That is the reason they basically invaded Colombia and make independent Panama (from Colombia, it made it dependent of the US). Now, while in theory Panama is now independent from the US, in practice it is not. If the US wants to create sanctions to those that treat the petrodollar or US hegemony, like Russia(now) or China(tomorrow), and make their commerce with West Africa-Europe and Brazil way more expensive, they could simply close the Panama channel to those countries. This is unacceptable for China. So China (and Russia) wants an alternative. It is also a good way to spend their huge stockpile of US dollars China has that loses value with each Quantitative easing.
- chrramirez 12y agoI'm from Nicaragua. This project is managed as a private business. No one knows nothing except for the president and his family. What the article says are some of thousands speculations. Telemaco and his kinds only repeat what they are instructed to say. Pure bullshit that only dump people believe. Here, most people believe that with this project Nicaragua will become a first world country. But also, here most people are not that bright. I think that this project is not really about a canal. That's a mouse trap. It's about a possible oil in the atlantic coast what Ortega and Co. are seeking. The treaty that was signed between HKND and Nicaragua gives the right to HKND to appropriate "any land" it may require for the project. Few days later of the singing, a British oil explorer announced a "very possible" presence of oil in the atlantic coast of Nicaragua.
- sml0820 12y agoA Chinese man, who makes a living building various forms of infrastructure, is willing to put $300 million of his own money of $50 billion required into building infrastructure in Nicaragua. Meanwhile Nicaragua is willing to accept $50 billion of infrastructure investment. Sounds like wishful thinking from both sides. As far as Oil, building a canal is not the way to reap rewards from oil. Here is a more relevant quote "U.S. firm, Noble Energy has given up on an exploratory oil well in Nicaragua, dubbed “Paradise 1,” after spending $90 million at the site. The firm concluded that there was not oil in sufficient quantities to justify further investment in the site." November 15th, 2013
- sml0820 12y agoAlso, to further clarify from an investor perspective: Let's say the canal is able to generate twice the income (revenue minus costs) that panama canal currently generates indefinitely, which comes to 2.8 billion every year forever. Let's assume the cost of capital for this project is 10% (a standard amount depending upon the investors). With a 50 billion dollar initial investment the Net Present Value of the project is -22 Billion. In other words, in an ideal scenario the investors are better off lighting 21 billion dollars on fire right now than investing in the project...run.
- deleted 12y ago[deleted]
- brotchie 12y agoDisappointed you can't make a Palindrome out of it :(
- danyim 12y agoDid you hear the recent NPR segment on the Panama canal too?
- Yardlink 12y agoWhenever there are ambitious plans for a poor country, people think of all kinds of reasons not to - the environment! the culture! the local economy! people's family homes! But they forget "these people are already screwed!". This canal is a risk with a bigger upside than doing nothing.
- hackuser 12y ago> Whenever there are ambitious plans for a poor country ... ... outsiders impose their ideas on the locals, deciding what is good for them. This project should be entirely up to the people of Nicaragua, especially those who will lose land or livelihood.
- brianbreslin 12y agoSo I had read that this guy the point person from China had a dubious history of floating giant infrastructure projects that never materialized. The Nicaraguans I've spoken too think the project is all BS. However once you pay off enough locals, consider it more likely. Big issue is that this will take 120 miles to cut, will they be able to recoup their investment if their fees to traverse are lower than panama, because they have to be to compete. Time crossing this canal has to be slower than panama's 48 mile long canal. So assume 2.5x travel time, you have to charge lower fees because of the travel costs associated with the extra distance etc. time = fuel Edit : See this recent article about wang jing http://www.reuters.com/article/2014/05/04/us-china-canal-insight-idUSBREA4309E20140504 http://www.reuters.com/article/2014/05/04/us-china-canal-ins...
- prawn 12y agoHow is there an increased distance of overall travel time? Does it matter significantly if the ship is travelling across the ocean or through a canal? From China to Europe is likely quicker from a more northerly canal, I'd guess by looking at maps.
- brianbreslin 12y agoNicaragua canal would be 120 miles long vs 48 miles of panama. But canal travel is much much slower than open ocean travel. Panama takes 8 hours to traverse the canal, imagine one 3x as long would take almost 3x as long to cross. So 24 hours.
- mark_l_watson 12y agoI have gone through the Panama Canal twice (I like cruise ships :-) It is slow at each end going through the locks, but not so slow going through the lakes.
- morkfromork 12y agoThe ports at either end of the Panama Canal are controlled by a subsidiary of Hutchison Whampoa Limited a Hong Kong based company. Wonder if there's a connection to this project.
- based2 12y agohttp://en.wikipedia.org/wiki/Suez_Canal#Construction_by_Suez_Canal_Company http://en.wikipedia.org/wiki/Suez_Canal#Construction_by_Suez... http://en.wikipedia.org/wiki/Panama_Canal#Later_developments http://en.wikipedia.org/wiki/Panama_Canal#Later_developments
- pron 12y agoThe necessary background: http://www.newyorker.com/magazine/2014/03/10/the-comandantes-canal http://www.newyorker.com/magazine/2014/03/10/the-comandantes...
- brianbreslin 12y agoWouldn't this also have disastrous effect on the atlantic fisheries of the gulf of mexico/Caribbean ?
- tauslu 12y agoFor those who wonder how Panama Canal opened up (how hard it is to open a canal at that geography due to diseases, soil, water), you may want read The Path between the Seas http://www.amazon.com/exec/obidos/ASIN/0671244094/bobsutton-20 http://www.amazon.com/exec/obidos/ASIN/0671244094/bobsutton-...