Construction begins on disputed Nicaragua canal linking Pacific Ocean and the Caribbean

A boy is seen sitting in a boat along the shore of Cocibolca lake in Rivas, Nicaragua on Dec 11, 2014. The construction of Nicaragua's controversial US$50-billion (S$62.52 billion) canal linking the Pacific Ocean and the Caribbean begins Monday,
A boy is seen sitting in a boat along the shore of Cocibolca lake in Rivas, Nicaragua on Dec 11, 2014. The construction of Nicaragua's controversial US$50-billion (S$62.52 billion) canal linking the Pacific Ocean and the Caribbean begins Monday, with workers breaking ground on the secretive project that is opposed by some farmers and native peoples. -- PHOTO: AFP

MANAGUA (AFP) - The construction of Nicaragua's controversial US$50-billion (S$62.52 billion) canal linking the Pacific Ocean and the Caribbean begins Monday, with workers breaking ground on the secretive project that is opposed by some farmers and native peoples.

President Daniel Ortega and Chinese-firm HKND are scheduled to inaugurate the canal in a ceremony in the capital Managua.

The project intends to open up a lucrative trans-ocean shipping route to rival the Panama canal further south. It could be a major financial boon for the Central American country.

Some farmers and native peoples living on the route oppose the project that will disrupt life along a 280-kilometre long corridor. The canal itself will be between 230 and 520 meters wide.

Nicaragua has kept the canal's technical, environmental and financial studies secret and Chinese-tycoon Wang Jing's company HKND was granted the project under favourable conditions.

Congress passed a law in 2013 giving Wang hiring and land expropriating powers and exempted his company from local tax and commercial regulations.

The contract conditions, which also allow HKND to operate the canal for 100 years, have drawn criticism and from some in the political and business community.

Environmentalists have warned the canal could destroy sensitive habitats and cloud Lake Nicaragua's waters. The area is also susceptible to earthquakes, scientists have said.

The company is expected to employ 50,000 workers over five years of building work.

Construction will begin at the mouth of the Brito river on Nicaragua's Pacific coast.

The canal will then run across Lake Nicaragua, through rainforest and at least 40 villages before terminating at the mouth of river Punta Gorda in the southern Caribbean.

A canal through Nicaragua has long been considered but was only thought to be financially viable in recent years.