MANAGUA, Nicaragua — NOW that Nicaragua has picked a path for a Chinese firm to dig a canal connecting the Caribbean and the Pacific, environmentalists are worried about a huge lake on the route.

They fret about the effects of ship traffic on the health of Lake Cocibolca, the largest freshwater body in Central America.

The business community meanwhile has welcomed word of a route being chosen with some scepticism, saying it will await reports on the environmental, trade and financial aspects of the mega-project.

There is no significant opposition to this project that Nicaraguans have dreamed of since the Spanish colonial era and which would create a canal to compete with the Panama Canal.

But the estimated cost — US$40 billion — is four times the national GDP. That has some people worried, as well as potential environmental fallout.

President Daniel Ortega’s government, however, predicts the project will create enough work to drag Nicaragua out of poverty, which affects 45 per cent of its six million people.

In 2013, it granted a 50-year concession to build and operate the canal to Chinese businessman Wang Jing, who is now chairman of the HK Nicaragua Canal Development Investment Co (HKND). That concession is renewable for an identical stretch of time.

“We are already envisioning little houses for people,” said Kamilo Lara, who represents Nicaraguan civil society in a multi-sector Canal Commission, responsible for administering the project.

Environmental impact studies will be done on schedule, he added.

“Nicaragua is now officially beginning the work related to the Great Canal,” said the presidential adviser for environmental issues, Telemaco Talavera.

Among things to be done now are designs for six projects that go along with the canal — including two ports, an airport and a duty- free zone.

The route picked for the canal covers 278 klilometres (174 miles), of which 105 kilometres (66 miles) cross Lake Cocibolca.

The project also calls for construction of a big artificial lake, electrical power plants, a cement factory and a steel plant to guarantee supplies for the project.

Dong YungSong, an HKND official, presented the chosen route Monday at a ceremony in a Managua hotel for business leaders and academics. He spoke in Chinese, with an interpreter, and did not delve into environmental or financial issues associated with the project.

Dong did say the canal would not have a significant effect on water levels in Lake Cocibolca — also known as Lake Nicaragua and Lake Granada — or water supplies for people living near it.

But a conservation group called the Humboldt Centre expressed worry about what it called “ambiguities” in the canal route, and its effect on protected areas.

The centre said HKND has not given enough impact study details or technical explanations of the project for the government to be sure it is viable and safe.

“Today we still have more questions than answers over the major environmental issues,” the center said.

The chairman of a business group called COSEP, Jose Adan Aguerri, welcomed HKND’s presentation but said the group is awaiting new environmental impact study results.

Conservationist David Quintana said that among other major negative changes that will come with the canal, a nature reserve called Los Guatusos is doomed to vanish.

He said people living along the canal route should prepare for the worst, mainly because they will have to be moved away from their homes for good.