Behind Nicaragua's plans for a giant canal, mysterious Chinese backing

SAN MIGUELITO, Nicaragua – Colossal. Mammoth. Vast. There's almost no other way to describe the proposal to build a 170-mile, inter-oceanic canal across Nicaragua, and while the plan has been greeted with widespread skepticism, powerful global forces may also coax it forward.

Those forces include the rising economic might of China, the suspected backer of the proposal, and the emergence of ever-growing number of megaships that can't pass through an expanded Panama Canal but could transit the one proposed for Nicaragua.

Already, preliminary work has begun, at a cost to date of hundreds of millions of dollars. Land has been surveyed, routes identified, negotiations begun with landholders. Yet secrecy still cloaks the project, whose ramifications are vast. Tens of thousands of Nicaraguans would be displaced and hundreds of square miles of land would be given to the Chinese company that holds the concession to build the canal.

Other ramifications can only be guessed at: The impact the canal would have on Nicaragua's environment has yet to be made public. Also uncalculated: the ramifications on world trade that would come from the inter-ocean passage of ships so large that most U.S. ports can't handle them.

Another looming unknown: how the global balance might change with a Chinese-built and -financed canal dug across an isthmus that has been a nearly exclusive American zone for 200 years.

Whatever the long-term cost, and if its backers conjure up the financing, the creation of what would be the world's biggest canal is without doubt the largest earth-moving project of the modern era.

An army of 50,000 workers would be required to gash a 90-foot-deep ditch across Nicaragua. Plans call for more than 2,000 excavators and heavy earth movers.

Nothing built in the United States recently remotely comes close, neither the new San Francisco-Oakland Bay Bridge nor Boston's Big Dig.

Nicaraguans have dreamed of a canal for generations. So have the Americans, since the 1849 California Gold Rush, when they took steamships to the mouth of the San Juan River, traveled up the river, across Lake Nicaragua and on to the Pacific coast.

Near the end of the century, American engineers looked seriously at building a canal. But a postage stamp picturing an erupting volcano in Nicaragua scared U.S. lawmakers and persuaded them to build a canal in Panama instead.

Nicaragua's dream never died, and negotiations culminated in June 2013, when the National Assembly approved a 50-year concession for HKND Group — owned by Wang Jing, a billionaire telecom tycoon with powerful ties within China's long-ruling Communist Party — to build and operate a transoceanic canal, two ports, a free-trade zone, an airport, resorts and other projects.

The concession, which can be renewed for another half-century, gives Nicaragua the right to 1 percent ownership the year the canal comes into operation, rising by 1 percent a year until it owns half the project in 50 years.

Speed and secrecy have become project hallmarks.

Wang has pledged to finish the canal by 2020. Few details have emerged of how the company plans to settle with people who must be relocated.

Forty-seven protest marches against the project have unfolded along the route. A few have turned violent. The biggest of the marches occurred June 13 and drew more than 10,000 protesters in the city of Juigalpa.

The U.S. government has remained largely silent about the project, although the U.S. Embassy in Managua issued a statement in January calling for the government to offer greater transparency.

Mystery still surrounds how Wang plans to raise the money to finance canal construction. With a wealth estimated by Forbes magazine at around $7.7 billion, Wang would have to raise money elsewhere. His company has said it will place a listing on a stock exchange. It hasn't said where the listing will occur.

"It probably will become the most prosperous country in Central America. And I wish I could do the same for Bolivia," MacLean said.

"A lot of people in Nicaragua are missing the opportunity to look at this as a great, unique, once-in-a-lifetime opportunity."