El Nuevo Diario: HKND, The main work of the canal to commence in 2016
Note: This article was the headline on the front page and the "Topic of the Day" on page 2 of El Nuevo Diario of Nicaragua on June 23rd, 2015. The Chief Project Advisor of HKND Group, Bill Wild assured that the port in Brito in the west of Nicaragua, a free trade zone, and another area for economic development are projects that will begin to be constructed by next year at the latest.
By: Velia Agurcia, Benjamin Blanco
Bill Wild, the Australian engineer who is the main advisor to the canal concessionaire, stated in Managua that the funding sources for the Nicaragua Grand Interoceanic Canal project, which is estimated at US$50 billion, is information handled directly by HKND chairman, Wang Jing, and it is to be disclosed when the time is right.
Wild, who has similar experiences in various construction projects of the same magnitude as the one planned for Nicaragua, stated that it is normal to see uncertainty before getting financing for a project like this.
“But once you have financing in hand, you always see more interested investors show up because it is a typical investment project known as pension funds, meaning they yield very stable profitability although the rate is not very high; it is stable and once it has been built, it remains generating benefits and income. Hence, building a canal is a safe investment”, indicated HKND’s senior advisor.
Based on his 40 years of experience, Wild trusts there will be funding available for the Nicaraguan mega project. He was involved in iconic construction projects such as the Alice Springs-Darwin railway that connects northern and southern Australia, which is more than 1,000 km long. He also added that this project represents a huge opportunity for all Nicaraguan industries.
“Whenever we lead projects abroad, it is cheaper to use local resources and services than getting them from the outside. It has always been a rule for construction projects”, Wild claims.
He explained that the local staff that are to be employed during the first phase of construction will always find a job during the operational phase. So, for instance, people who build the locks are ideal candidates to keep working there when the locks are operating.
The results of the canal’s Environmental and Social Impact Assessments (ESIA) were handed over to the Grand Interoceanic Canal Commission and they also included the work and analysis for the construction of ports in Brito in the Pacific side and in Punta Aguila on the Caribbean shore, a free trade zone, and another zone for economic development, reported Wild.
“We cannot start excavating without a port in place to receive the heavy machinery and fuels, among other supplies”, highlighted Wild.
In addition to the ports and the construction of new roads, the project includes tourist resorts that will serve as vacation centers as well as an international airport. The latter two will require separate environmental and social impact assessments, according to HKND’s advisor.
Free trade zone
Nevertheless, Wild indicated that the free trade zone might start operating even before the canal begins operations.
“As a matter of fact, we will begin by the western port (in Brito), but I think we should start the free trade zone earlier on, as it will be close to the assembly area (for heavy machinery) and we will build roofs and conduct preliminary work exclusively for the free trade zone, hence it should start next year. It does not mean that it will be ready by next year. I personally believe that it (the free trade zone) may start operations before the canal does since we will have a port for trading goods”, Wild commented.
The economic development zone that will be created in Brito, at the request of the Nicaraguan government is another work that could inject a greater economic dynamism to the country, he said.
“The government demanded us to create an economic development zone in Brito, department of Rivas, right next to the free trade zone. The idea is to start this work to satisfy the canal’s first demands. It will be a zone to supply basic manufacture during the canal’s construction”, recalls the Australian specialist.
Part of the opportunities this site will have is the creation of factories for supplementary products needed. The best of this part, according to Wild, is that at the end of the project, such zone will remain there and the factories may continue operating in the future.
“We will build factories in that area for the project and it will become an economic development zone. The main work of the canal will begin next year, which is why we would like the zone to be ready by then”, explains the HKND representative.
“This is not part of the sub-projects. The sub-projects are the ports, the free trade zone, the airport, the tourist resorts and some of the roads. In fact, the canal itself is a sub-project, but it is the biggest of all”, adds Wild.
“What we do is to seek basic and simple goods by local production, where the factory business will be in that local development zone”, said Wild.
Projections of accelerated growth
Example • HKND Senior Advisor, Bill Wild, believes that with the Interoceanic Canal, Nicaragua could register an economic growth up to 10% of its Gross Domestic Product (GDP).
“You just have to see Panama and what happened to the Canal. There was nothing there when the Canal was constructed. It has no other resource but the canal. Historically Nicaragua was a country richer and more productive than Panama and one of the richest in Central America and now we see the GDP is US$11 thousand million and Panama’s is four times greater. I do not see any reason why Nicaragua’s GDP cannot compare itself to Panama’s. I believe that it will rapidly grow and it can reach 10%”, relies Wild.
“It is not true that the canal business is falling. Panama registered the greatest income in their canal’s history. Besides, there are other income through the ports, the free zone and the maritime industry services.” Bill Wild, HKND Senior Advisor.
Broadly, Wild explains that there is a stable growth in the maritime trade, particularly between the east of Asia and the east coast of Europe and America.
“The other thing is that the studies demonstrated that the market growth will help improve the project’s business case if enters operations later on, because in two years or more, the market will be greater”, explains the HKND representative.
Wild reported that more than two years ago, there were no ships with a greater capacity than 13 thousand containers, but in the world for the last two years there have been designing ships with the capacity of 17,000 and up to 25,000 containers.
“One of the biggest shipping companies in the world just announced that it is building 10 ships with a capacity of over 20 thousand containers, this is why without a doubt the capacity of the Nicaragua Canal that we are building has the proper dimensions for the future of the boats”, reported Wild.
- The End -