The Nicaraguan government has granted a concession to a mysterious Chinese company owned by Jing Wang, a little-known Hong-Kong based businessman, to build an inter-oceanic canal. This would provide an alternative to the Panama Canal that, 99 years after it first opened, is struggling to cope with shipping.

Despite being one of the most important decisions in Nicaragua's history, the legislative bill in question appeared virtually overnight and was approved as law only three days after it was sent to the parliament, with no serious national consultation or opportunity to hear the opposition from some of the country's leading scientists.

The company is the Hong Kong Nicaraguan Development Group (HKND), which has no experience with major construction projects. With an estimated cost of US$40 billion, the canal was slated to start in June 2014, but has been delayed to the end of the year

The Nicaraguan government claims the project will pull the country, in which 45% of the population live on less than US$2 day, out of poverty. But so far no feasibility studies have been revealed, and serious economists have expressed their concern that the canal will just be another enclave economy as it was for Panama. Because this private canal will not be a property of Nicaragua for 100 years, and since it will not be linked to the rest of the economy, it will not create wealth nor will it improve Nicaragua's economy.

Around 300km of excavations will be required to connect the Pacific Ocean to the Caribbean – three times the length of the Panama Canal. Along the route it will traverse Lake Nicaragua, the largest drinking water reservoir in the region, and cut through rainforests and ecologically valuable swamps.

READ MORE: Canal carved through Nicaragua will destroy rainforests, communities and wildlife