MercoPress. South Atlantic News Agency

Groundbreaking of Chinese-backed Nicaragua Canal commences

The canal wiill have 172-mile (278-km) canal, due to be operational by around 2020,

Protesters, skepticism did not stop the administration of President Daniel Ortega. Project seeks to reshape country's poor economy,

 Nicaragua on Monday announced the start of work on shipping canal designed to rival Panama's waterway and revamp the economy of the second-poorest country in the Americas, behind Haiti. The project is backed by China as it attempts to reshape its influence in the region currently dominated by the United States, which built the Panama Canal a century ago.

The groundbreaking was largely symbolic, as work began on a road designed to accommodate machinery needed to build a port for the canal on the Pacific coast. Nicaragua's government says the proposed 172-mile (278-km) canal, due to be operational by around 2020, would raise annual economic growth to more than 10 percent.

Construction of the new waterway will be run by Hong Kong-based HK Nicaragua Canal Development Investment Co Ltd (HKND Group), which is controlled by Wang Jing, a little-known Chinese telecom mogul well connected to China's political elite.

Flanked by Nicaraguan President Daniel Ortega, who is a former Marxist guerrilla leader, Wang Jing 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. By the end of the third quarter, excavation work would begin, with a tender for the design of the locks due by the end of the year, he said.

More than a year since it was first announced, the project faces widespread skepticism, with questions still open about who will provide financing, how seriously it will affect Lake Nicaragua and how much land will be expropriated for it.

One day ahead of the groundbreaking ceremony, dozens of furious Nicaraguans blockaded roads, stopping workers with the Hong Kong-based firm Hong Kong Nicaragua Development (HKND) from accessing the construction site.

In videos shared online by an activist group, protesters shouted “Viva Nicaragua!” while they blocked streets with a banner reading: “No to the canal.”

“This project will bring no benefit to the people of Nicaragua, it will only benefit the Chinese,” the South China Morning Post quoted 24-year-old protest leader Danilo Lorio as saying. “The compensation offer for our lands is ridiculous.”

There have been 17 such demonstrations against the canal in recent months with the largest on December 10 drawing a crowd of 5,000 to the capital Managua. Nicaraguans are angry over what they charge are illegal land seizures by the Nicaraguan government in order to pave the way for the massive and controversial infrastructure project.

The proposed canal is set to intersect Lake Nicaragua, known locally as Lake Cocibolca, sending cargo ships and tankers straight through the largest source of freshwater in Central America. Further, the canal is expected to displace tens of thousands of mostly rural and indigenous landholders and would likely devastate over 400,000 acres of rainforests and wetlands, which scientists say are critical to local and regional biodiversity conservation efforts.

According to Ohio State University doctoral candidate Chris Hartmann writing for Foreign Policy in Focus, “Farmers and residents near the lake are concerned that the proposed canal will disrupt subsistence agricultural practices, further pollute the lake, and decrease water for personal consumption and irrigation. Both farmers and residents worry they will be evicted from their lands, and many will refuse to leave willingly.”