Nicaragua's $50 Billion Panama Canal Alternative "Fraught with Risks and Uncertainties"

HKND IS led by billionaire Wang Jing

Environmental Resources Management Ltd. has released a study claiming Nicaragua's proposed $50 billion canal project is "fraught with risks and uncertainties" and could cause more harm than good, Reuters reports.

The environmental consultancy was commissioned by the project's builder and operator, Hong Kong-based HK Nicaragua Canal Development Investment Co Ltd. (HKND).

If completed, the canal could give China a significant foothold in U.S.-dominated Central America, however the study concluded that the five-year construction timeline would create "logistical, procurement and workforce challenges."

The report, which was delivered in June and released to the public this week, also accused HKND of not following transparency standards, including discussing the project with about 30,000 people who may be required to move from their homes or lose their livelihood due to the canal's construction.

The report stated that "Nicaragua may be worse off than doing nothing" if a strong business case for the canal, secure financing, and measures to limit the project's environmental impact cannot be achieved.

Environmental Resources urged the Nicaraguan government to verify that HKND complies with international standards, including earthquake hazard assessment and protecting biological reserves, before construction begins.

HKND was scheduled to break ground on the canal in September but has delayed the start to early next year, pending further studies.

However last month it began the process of aerial surveying along the route.

In August, HKND said in a statement that 78 percent of Nicaraguans responding to a survey support the plan to build the canal.