Wang Jing, owner of Beijing Interoceanic Canal Investment Management Company Photo: IC

Nicaraguan President Daniel Ortega and Chinese tycoon Wang Jing on Saturday said plans to start building a $40 billion canal across the Central American country were on track for late 2014.

Wang Jing's Beijing Interoceanic Canal Investment Management Company has secured the right to dig a waterway in Nicaragua that will rival the Panama Canal and be hugely significant to world trade if it is completed.

Ortega gave the group a concession to operate the future waterway for 50 years, renewable for another 50.

"The Nicaraguan government and HKND Group are pleased to confirm that canal construction work will begin as planned in December 2014," the two said in a brief statement.

HKND Group is a unit of holding company the HK Nicaragua Canal Development Investment

Their remarks appeared aimed at shooting down any idea of a delay. Nicaragua's Canal Authority chief Manuel Coronel Kautz recently was quoted as saying work would not start on the Nicaraguan waterway until 2015.

It is the biggest infrastructure project by far attempted under the government of Ortega. And it would have huge strategic value, potentially interrupting commerce in Panama's waterway between the Atlantic and Pacific.

Panama is expanding its century-old canal, and a massive project is running behind schedule.

The Panamanian upgrade aims to make its 80-kilometer (50-mile) waterway, which handles 5 percent of global maritime trade, big enough to handle new cargo ships that can carry 12,000 containers.

That project is costing $5.2 billion, including a third set of locks for the canal which currently welcomes ships that carry up to 5,000 containers.

Feasibility studies are underway in Nicaragua. But it is not yet known how the future canal might be built in mechanical and logistical terms, if it gets a final green light.