Hong Kong-based Nicaragua Canal Development Investment Co Ltd Chairman Wang Jing greets young people before work started on the Interoceanic Grand Canal in the Nicaraguan town of Brito on Dec 22, 2014. [Photo/Agencies]

Chairman calls $50 billion, 278-km water way a 'boon to future of mankind'

The Nicaragua Canal project, officially launched on Monday, is set to spur the economy and potentially turn the country into a Central American trade hub, experts said.

Many believe the canal could double Nicaragua's revenues, help slash extreme poverty from 14 percent to 7 percent, and provide one-quarter of those working in the underground economy with a formal job, among other benefits.

The $50 billion project, which will rival the Panama Canal to the south when completed in 2019, is being led and built in southern Nicaragua by the Hong Kong-based Nicaragua Canal Development Investment Co Ltd.

The waterway will be a boon to the future of mankind, HKND Group Chairman Wang Jing told the inauguration ceremony.

Laureano Ortega Murillo, an adviser to PRONicaragua, which promotes foreign investment in the country, said the project will most of all benefit future generations.

"This is a project by the young, for the young," said Ortega Murillo at the ceremony.

"That's why Nicaraguan youth today welcome Wang Jing, to fill him with the strength and the vitality to continue making progress toward the success of this great project."

In the immediate future, moreover, the canal project is poised to activate the Nicaraguan economy by generating 35,000 construction jobs, said President of the Nicaraguan Chamber of Construction Benjamin Lanzas.

Nicaragua's government said the proposed 278 kilometer canal, due to be operational by around 2020, could raise annual economic growth to more than 10 percent.

Work on the waterway began on Monday with the building of peripheral infrastructure, such as the roads needed for vehicles to access the region.

Able to accommodate cargo ships with a capacity to carry 18,000 shipping containers, it will connect Nicaragua with the world and increase its national and international trade, said Lanzas.

"This project, which includes the construction of an airport, two ports, highways and the Grand Canal, will benefit Nicaraguans on a scale that we can't even calculate right now," Lanzas told El 19, Nicaragua's semi-official digital daily.

Numerous Nicaraguan companies have also entered a bidding process with HKND for various construction undertakings, he said.

But the canal also has its detractors, with sporadic protests breaking out as early as 2013, when the project was first approved by the country's legislature.

Residents in the area to be affected worry about being displaced by the canal, which will cut through the country, while environmentalists are concerned the large-scale project might harm the ecosystem.

The route of the canal linking the Atlantic and Pacific oceans will pass through Nicaragua Lake, a more than 8,000-square-km body of freshwater that is Central America's biggest lake and the 19th largest in the world.

Addressing their concerns, Wang said: "As to the sacred topic of environmental protection, we can say in the past two years each member of our team has been able to get to know, protect, develop and make proper use of the wildlife."

Speaking through an interpreter, Wang added that the project has undergone days and nights of discussions regarding the protection of cultural and historic monuments, valuable flora and fauna, and the country's natural landscapes.

Wang said the tender for the preliminary design of the project would be offered by the end of the first quarter of 2015, by which time an environmental impact study would also be finished.

Earlier, Nicaraguan presidential spokesman Paul Oquist said feasibility studies, including a McKinsey Co report that experts said will define interest in financing the canal, had been delayed by changes to the route and would be ready by April.

Oquist said the "core financing" would come from public and private Chinese money, without giving a percentage.

A top Nicaraguan religious authority, Cardinal Miguel Obando y Bravo, called on Nicaraguans to support the canal project, saying it will benefit employment.