A Chinese businessman’s proposal to carve a 175-mile shipping canal through Nicaragua could bring more cargo vessels to the Port of Charleston.
The ambitious $40 billion venture, however, has so far drawn a tepid response from a prominent local maritime officials and others.
Jim Newsome, president and chief executive officer of the State Ports Authority, said there’s been several competitive options proposed to the Panama Canal, but none has come to fruition.
That being said, it’s best to focus on the “industry-changing investment” the Panama Canal Authority is making with its $5 billion expansion of the famous shortcut so it can accommodate the wave of larger vessels, Newsome said.
“We think this investment, combined with the option of Suez Canal transit which has more recently emerged for large container ships, will meet the requirements of ship lines and make another canal impractical financially,” Newsome said. “Panama has invested a great amount in understanding global logistics requirements going forward, and this will not be easily duplicated”
The Panama expansion is expected to be completed by 2015.
Newsome added that the existing canal also has the option to create another set of locks if it needs to grow capacity, a plan he said “will come at a much lower incremental cost than a new canal.”
Pam Zaresk, president of the nonprofit Maritime Association of South Carolina, said the idea of developing another path to speed up trade between Asia and Charleston is a “good idea” for growing business.
“Our sense is that we have a very viable port here and the more ships that can come use it, the better it is for everyone,” she said.
Wang Jing, chairman and owner of Hong Kong-based HKND Group, faces skepticism that he can deliver the $40 billion Nicaragua project. He said Tuesday that his idea of building a rival canal to Panama’s is serious and is backed by experienced consultants.
“We don’t want it to become an international joke, and we don’t want it to turn into an example of Chinese investment failures,” he said.
Wang, 40, a relative newcomer whose business history prior to 2010 is virtually unknown, received approval from Nicaragua’s government earlier this month for HKND to study, and possibly build and run a shipping channel across the Central American country. Some Nicaraguan lawmakers and residents have expressed reservations about the company’s competence.
Wang said early assessments of the project have been favorable, taking into account future economic growth of the U.S. and China as well as the enormous Chinese appetite for mineral resources from Latin America.
“The world trade has been so developed today that it needs a new canal,” Wang said. “The Panama Canal is not enough for the trade conducted currently between East and West.”
He said return from the project “is sure to make every investor smile broadly.”
Wang said his consultants on the project have rich experience and include U.S.-based McKinsey & Co. and China’s biggest construction firm, the state-owned China Railway Construction Corp.