Nicaragua on Monday broke ground on its Chinese-led $50 billion shipping canal, a massive infrastructure project that aims to rival Panama's waterway and revitalize the economy of the second-poorest country in the Americas
Nicaragua's government says the proposed 172-mile (278-km) canal, due to be operational by around 2020, would raise annual growth to over 10 percent and help put an end to endemic poverty in the country of 6 million people.
It could also give China a major foothold in Central America, a region that for years has been dominated by the United States, which completed the Panama Canal a century ago.
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.
"This moment will surely go down in history. I announce the start of work on the great canal of Nicaragua," Wang Jing said at an opening event on Nicaragua's Pacific coast, attended by the country's Vice President Omar Halleslevens.
Nicaragua's leftist president, former Marxist guerrilla Daniel Ortega, is due to speak about the canal later on Monday.
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.
"Shipping would love for this to happen, but it's a luxury not a necessity," said Greg Miller at consultancy IHS Maritime. "Given how much this will cost, it's hard to take a stance on whether it will happen or not until there is a signal whether that money is not available or not."
Nicaraguan officials say they want the canal to receive international funding and reject the idea that China
's government will bankroll the project, which is worth roughly four times the gross domestic product (GDP) of Nicaragua.
"This is not the Chinese turnkey project where they bring in all of the workers, every last nail, and every last noodle, and only buy a little diesel to get the machines they bring in running," presidential spokesman Paul Oquist said recently.
(By Gabriel Stargardter; editing by Gunna Dickson)