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Earlier this year, construction began in Nicaragua on a $50 billion inter-oceanic canal that is being designed and financed by the Chinese. Upon target completion date in 2020, the waterway would complement the expanded Panama Canal by accommodating bigger container and cargo ships. Nicaragua, which is Latin America's second poorest country after Haiti, sees the project as its ticket to prosperity.

But scientists and environmentalists are up in arms because of what they describe as insufficient studies of the project's potential environmental and social impacts. The prime source of worry is Lake Nicaragua, Latin America's largest fresh water lake, and an important natural resource not just for Nicaragua but other Central American countries that may have to turn to it for drinking water in coming years as populations grow and the planet warms.

Since the average depth of the lake is only 8 meters along the canal's 175-km portion that crosses Lake Nicaragua, project developers would have to dredge a up to 22 meters of additional depth all along that path so that supertankers and enormous container ships they hope to attract and which need 30 meters of draught can be accommodated. That means that more than 4 billion cubic meters of sedimented lake bottom will have to be disposed of, jeopardizing water quality and raising questions about where the dirt will end up.

The country granted Chinese businessman Wang Jing a 100-year concession without first requiring he submit an environmental impact assessment report and an economic feasibility study—highly unusual omissions given the scale of the project. A detailed environment impact student is due from UK-based ERM consultants in the coming months, as is a feasibility study by McKinsey & Associates.

Nicaraguan officials say the Chinese were given the concession without the government first receiving detailed impact studies to save time and because the Chinese insisted on guarantees that after investing hundreds of millions in those studies and preliminary engineering work they would be assured of having the concession. Critics say that the project developers are "flying blind" environmentally, and that in addition to the lake, thousands of acres of wetlands and nature reserves will be put at risk. In this project, journalist Chris Kraul looks at how the proposed canal will impact Nicaragua and beyond.

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