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HKND (Hong Kong Nicaragua Canal Development) Group is a private infrastructure development firm that is based in Hong Kong and registered in the Cayman Islands. HKND was founded in 2012 with the purpose to develop the Nicaragua Canal as a wider and deeper alternative to the Panama Canal. HKND is owned by HK Nicaragua Canal Development Investment that is part of the businesses owned or controlled by the Chinese billionaire Wang Jing. In 2014 it was announced that an IPO is being prepared to provide financing for the project.
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The project
The development of the Nicaragua canal is the first project for HKND. The cost of the project is estimated to be US$40bn. or US$50bn. The Nicaraguan government approved the Master Concession Agreement with HKND on June 13, 2013 thereby granting the company "the sole rights to the HKND Group to plan, design, construct and thereafter to operate and manage the Nicaragua Grand Canal and other related projects, including ports, a free trade zone, an international airport and other infrastructure development projects." The agreement lasts for 50 years and is renewable for another 50 years. HKND will pay the Government of Nicaragua US$10m annually. After ten years, Nicaragua will receive shares of HKND at intervals.
The Master Concession Agreement has been criticized by some who argue that Nicaragua sold its sovereignty to a foreign-owned private company for a century. Further, the agreement was negotiated without transparency and national consensus. "All judicial, labour, fiscal and financial rights and sovereignty of the country (have been conceded) to Wang". While the reserves of the Nicaraguan National Bank serve as collateral on part of Nicaragua, HKND has no such potential liability. Further, some are concerned about environmental impact and that legal rights of indigenous populations are being violated.
Work started officially on December 22, 2014 and is scheduled to be completed by 2020.
Chief officers
Wang Jing is the chairman and chief executive officer of HKND. He managed and invested in various businesses, including infrastructure, mining, aviation and telecommunication. Other chief officers include Bill Wild as the chief project advisor, KK Lee as the deputy general manager, and Ronald MacLean-Abaroa, the former mayor of La Paz, as spokesperson.
Partners
HKND has teamed with other companies for the canal project. A major partner is the state-owned China Railway Construction Corporation (CRCC). Its 4th Institute is in charge of designing the canal while the 11th Institute will build it.
State-owned Xugong Group Construction Machinery Co, one of China's biggest construction equipment manufacturers, will take a 1.5 to 3 percent stake in HKND and become the sole supplier of construction machinery.
As of 2014 other partners include McKinsey & Co to conduct an economic feasibility study, Environmental Resources Management Ltd. to study environmental and social impact of the project, Studiebureau voor Bouwkunde en Expertises (SBE), a Belgium-based civil engineering firm for canal hydraulics, and MEC Mining, an Australia-based engineering consultant company. Also involved are McLarty Associates and the law firm Kirkland & Ellis.