Doubts deepen over Chinese-backed Nicaragua canal as work starts

MANAGUA, (Reuters) – When one of the poorest countries in the Americas and a little-known Chinese businessman said they planned to undertake one of the biggest engineering projects in history, few people took them seriously.

A year and a half after the $50 billion project to build a canal across Nicaragua was launched by President Daniel Ortega, a former Marxist guerrilla, the doubts have only grown.

Work officially began this week. But reporters hoping to see any evidence of how it would be done in a fraction of the time it took to build the much-shorter Panama Canal, or discover who would pay for it, were left with more questions than answers.

At events marking the start of what is meant to be a five- year job, Nicaraguan officials and the Hong Kong-based company behind the canal dodged questions about its financial backers, mounting delays and whether Washington had been consulted.

So far the company, the HK Nicaragua Canal Development Investment Co Ltd, or HKND Group, of telecoms entrepreneur Wang Jing, has identified only $200 million in funding.

Such is the skepticism that even those with most to gain from the project, whose estimated cost is four times Nicaragua’s gross domestic product, acknowledge it looks far-fetched.

“The canal has one enemy and that’s the lack of information,” said Benjamin Lanzas, head of Nicaragua’s construction industry group, who met Wang in China. “That lack of information has created a great deal of speculation, and that speculation, those expectations, have created a lot of doubt.”

Supporters point to Monday’s start as evidence that the plan is on schedule. But key feasibility studies on the canal have been pushed back to next April, and excavation work is not due to begin until the second half of next year. At 172 miles (278 km), the waterway is over three times the length of the 100-year-old Panama Canal, which was completed by the United States 34 years after French engineers began it.

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