350px national emblem of the peoples republic of china svg Chinas Ordinary Billionaire Behind Grand Nicaragua Canal Plan

National emblem of the People’s Republic of China (Photo credit: Wikipedia)

If you’re interested in the proposed Nicaragua Canal Project, you should be interested in China’s ‘ordinary billionaire behind Nicaragua Canal plan.

 

The interview is with Reuters so follow the link to get the rest of the story. But before yo ugo, ponder for a minute that the proposed cost of the canal is now flagged publicly as $50B. This is up from $40B quoted last year when the deal was struck between Nicaragua and HKND, the company slated to oversee the building of this monster.

Consider also that this is a 25% cost increase before any work has started and before the environmental impact assessment report has been published. That report is due if not overdue and I wonder what it will contain.

The cost ratchet is on par with Bengt Flyvbjerg’s general findings about mega project overruns although we should expect massive cost overruns on an ongoing basis once construction starts. This is because the underlying dynamic in large construction projects is to press bidders to submit the lowest possible bids, which nobody really believe to be realistic.Then the battle begins as the contractors start looking for opportunities to submit change orders. Read More …

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Some Thoughts about Dynamic Capability

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I had some thoughts about dynamic capability this morning. According to Wikipedia, Dynamic capability is defined by Teece et al. (see Sources below) as “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.” That definition covers a lot of ground, but the premise…

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If Your Process Were a Drug FDA Would Not Approve It

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  Think about what your process does and what you could learn from likening it to something else we’re more or less familiar with. If you did, I would venture that if your process were a drug, FDA would not approve it.   In case you object that the comparison…

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Russia Interested in Nicaragua Canal Project

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From La Prensa, Nicargua’s leading paper I got this tidbit: Russia is now expressing interest in the Nicaragua Canal Project. This is interesting. However, I am not at all convinced that Russia has the long term policy focus necessary to stay with a project of this kind as a financier….

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A Note on Enhancing Productivity in Latin America

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Just a quick note on enhancing productivity in Latin America. This is an interesting topic because it makes us examine our assumptions. Is Latin America different in this respect from other economies like North America, EU or China? I found the discussion at the LSE podcast Enhancing Productivity in Latin America:…

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Insight Into the Role of Banks and Their Impact on the Rest of Us

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Let me direct you to some insight on the role of banks and their impact on the rest of us. It’s a piece over at The Baseline Scenario blog. The topic refers to the often discussed role of banks and how bank balance sheet leverage should be of no concern…

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The 4 Degree World Should Scare You

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  The 4 degree world should scare you. Let me explain. I shared the news recently about the UN report on the science behind climate change research and the current predictions for how warm our world will be by mid-century. The report predicts a 2 degree world, that is a…

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Can We Make 3D House Printing Accessible?

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Here is a follow-on thought to my post on 3D printing of houses. This comment addresses scalability, an important economic factor. Essentially, the commenter in the linked post is concerned that we are moving to a capital intensive process, which will not work in many economies. I agree this is…

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Intriguing Consequence of Global Risk Evolution

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I was listening to an LSE podcast in my car and picked up a little gem of an insight: an intriguing consequence of global risk evolution. The podcast was War: What is it Good For by Professor Ian Morris. Here’s the preamble to put you in the picture: If you…

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Is 3D Printing the Revolution We Need in House Construction?

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The construction methods and productivity in house construction has remained remarkably unchanged since about the 1940-50s and the post WWII construction boom. I have been following the construction industry productivity research for some time and it is not a pretty picture. It is true that residential and commercial construction are not…

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The Champion of Free Markets is Its Own Worst Enemy

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Not sure if you have noticed, but Tesla, the electric car manufacturer is being barred in state after state in the USA from selling its cars directly to the public. The car dealer lobby is furious at being bypassed and seems to have enough clout to sway legislators to restrict…

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