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“Who’s going to invest when they don’t even know where the canal is going to be built?” said Bob McMillan, former chairman of the Panama Canal Commission, referring to HKND’s lack of a set route across Nicaragua. “The [various proposed] paths all go through Lake Nicaragua, which is the source of fresh drinking water for most of Nicaragua. What if there is a damaged ship that leaks petroleum or some other kind of chemical into the lake? That would be a disaster for the drinking water.”

Mr. McMillan also cited concerns about whether the cash-strapped Nicaraguan government would be ready to manage the canal.

“Panamanians were totally ready to take over the Panama Canal’s management when the transfer took place in 1999,” he said. “[Will Nicaragua be] as ready or would more Chinese have to come to the country to ensure an effective operation of the canal — if the canal is actually built?”

According to the company’s projections, the canal would create some 40,000 construction jobs and virtually double Nicaragua’s per-capita gross domestic product.

Old idea

The idea of building a canal across Nicaragua has a long pedigree, attracting interest from the likes of Henry Clay, Cornelius Vanderbilt and French Emperor Louis Napoleon. The Theodore Roosevelt administration considered a Nicaragua route before political events opened the shorter Panamanian option at the dawn of the 20th century.

China, as the latest emerging global force, is repeating the pattern even as it builds economic relationships across Latin America.

“We’re coming back full circle to where we were 165 years ago. It’s not particularly surprising,” said Cynthia Watson, a professor of national security at the National War College. “Another canal would certainly bring to fruition what has been kind of a low-level but persistent voice that Beijing has had over the last about 15 years, that they would like to have greater access to the Atlantic and be able to find an alternate route, beyond Panama, where they wouldn’t feel that the U.S. could potentially impact on their access to either end of that canal.”

Ms. Watson warned to not assume that the canal is “absolutely going to happen,” citing technical problems of building a canal, including the engineering challenge posed by Nicaragua’s frequent earthquakes.

The enigmatic Mr. Wang faces additional skepticism based on his ambiguous background. The 40-year-old businessman built a fortune on telecommunications and is chairman of more than 20 enterprises around the world, but has no experience with large infrastructure projects. The Nicaragua canal is HKND’s first such project.

Despite Mr. Wang’s insistence that he has no connection to the Chinese government, the South China Morning Post reported last week that the technical feasibility study of the Nicaragua canal is being carried out by one of China’s largest state-owned companies, China Railway Construction Corp.

Mr. Ortega faces opposition at home to the Chinese canal proposal, from environmental groups and from political rivals who question the credentials of Mr. Wang.

If more information about the lead investor isn’t forthcoming, “we can assume this is a swindle, a deal with a front company to get a concession, and then sell the rights to someone else,” officials of the opposition Sandinista Renovation Movement said in a recent policy statement, according to The Associated Press. “It’s a corrupt deal to make a lot of money with fake investors.”

Supporters of the canal say the project will provide massive economic benefits to the impoverished country without any expense on the part of Nicaragua.

Construction of the canal is set to begin by the end of 2014 and be completed by 2019, Mr. Wang said.