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How Realistic Is Nicaragua's Plan for Inter-Ocean Canal Like Panama's?

In a placid lagoon about a mile inland from the Atlantic coast in southeast Nicaragua, the mast of Cornelius Vanderbilt's dredge boat rises out of the water. The railroad tycoon abandoned it along with his dream of building an inter-oceanic canal in the 1850s. More than 160 years and several failed plans later, Wang Jing, a 40-year-old Chinese telecommunications billionaire, has emerged as the next mogul to give it a go.

How Realistic Is Nicaragua's Plan for Inter-Ocean Canal Like Panama's?

Nicaraguan President Daniel Ortega signed a 50-year concession on June14 that grants Wang's HK Nicaragua Canal Development Investment Co. (HKND) rights to develop a $40bn project that includes a canal, an oil pipeline, two deepwater ports, an inter-oceanic railroad, and two airports.

The project's announcement and hurried congressional approval have been met with skepticism. The first of many Nicaragua canal schemes was hatched during the administration of U.S. President John Quincy Adams. The latest has some analysts scratching their heads. "The process of this project's development has been extremely strange and has left many questions unanswered," says Esteban Polidura, a Latin American analyst at Deutsche Bank. "We have lots of doubts that this is a serious and viable project."

Wang, whose HKND Group launched its website just days prior to the concession signing, is relatively unknown. "Why Wang Jing?" asks Margaret Myers, China and Latin America program director of Inter-American Dialogue, a Washington research group. "He has no experience in canals or large infrastructure projects. He is a telecommunications guy in China."

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Keywords: international trade, Nicaraguan inter-oceanic canal, global logistics, logistics services, logistics & supply chain

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