More Sources of Financing for Three Gorges Project

By the end of 2000, a total of 63.3 billion yuan (about US$7.63 billion) has been allocated for the construction of a gigantic water control project at the Three Gorges on the middle reaches of the Yangtze River.

According to the budget estimate approved by the state, the Three Gorges project, which began construction in 1992, will cost a static investment (without regard to interest and price hikes) of 90.09 billion yuan (some US$10.85 billion), of which, 50.09 billion yuan (about US$6.04 billion) will be spent on construction of key works such as the dam, power generating stations, and the ship locks, and the remaining sum will be used for resettlement of local residents.

However, sources from China Yangtze River Three Gorges Project Development Corporation said that when the project is finished in 2009, it will cost 180 billion yuan (about US$21.69 billion) if interest and price hikes are taken into account, which will still be 20 billion yuan (about US$2.41 billion) less than the predicted cost.

The investment for construction of the Three Gorges Project will be raised via the Three Gorges Project Fund which is being levied by raising electricity prices in most areas of the country, income from electrical generation at the downstream Gezhouba Water Conservation Project, bank loans, the use of overseas investment, the income from electrical generation when the first group of the electrical generators at the Three Gorges Project are installed and put into operation in 2003, as well as the corporate bonds specially issued for construction of the Three Gorges Project, said the sources.

The sources added that it has altogether issued three terms of corporate bonds on the domestic capital market and has raised six billion yuan (about US$723 million) in funds for construction of the Three Gorge Project.

The project, situated near Yichang in central China's Hubei Province, consists of a 1,983 meter long by 185 meter tall dam and 26 generating units with a combined capacity of 18.2 million kw.

On completion in 2009, the project will be able to generate 84.7 billion kwh of electricity annually. Its permanent locks will allow a fleet of more than 10,000 deadweight tons to pass.






People's Daily Online --- http://english.peopledaily.com.cn/