Three Gorges Probe

News briefs

December 28, 1998

(i) Premier Urges “Strict” Quality Control of Dam

[TGP, 12/98] China’s Premier Zhu Rongji urges builders of Three Gorges dam to pay more attention to the “quality” of its construction, an AFP story quotes Xinhua.

“Quality means the life of the Three Gorges Project, and the responsibility on your shoulder is heavier than a mountain,” Zhu says while touring the construction site in Yichang, Hubei Province.

He urges to introduce a “strict engineering-quality monitoring system” into the project, adding that foreign companies with reputation and experience in the quality monitoring field may be invited to ensure the high quality standard of the dam.

Meanwhile, in a separate story, a leader of China Yangtze Three Gorges Project Development Corp (CTGPC) admits that defects have been reported in the dam construction, reports China Daily.

“Not all of the work completed is of top quality and a few defects have been reported since last year,” Wang Jiazhu, vice-president of CTGPC was quoted as saying.

The report lists five defects. Three of them concerned the weakness of poured cement or small cracks. Two were related to substandard facilities used in the temporary ship lock used for navigation.

(ii) Global Bond “Should Not Fund” Yangtze Dam

[TGP, 12/98] An environmental group urges that proceeds from China’s recent global bond issue, which raised $500 million this month, should not go into facilitating the construction of the Three Gorges project.

In a letter addressed to Goldman, Sachs & Co., one of two financial institutions marketing the bond issue, Owen Lammers, Vice President of the International River Network (IRN) insists that assurance should be made that none of the earnings from this and subsequent offerings “will find their way to the Three Gorges Dam.”

China sealed a landmark global bond issue this month, raising $500 million in the international market, according to a Reuter’s story. The global issue is the first major sovereign issue from an Asian country to be launched into international markets since South Korea issued $4 billion in bonds in April.

Beijing originally planned to issue $1 billion worth of bonds in the summer, but was forced to put it on hold due to the Russia economic crisis in August. Analysts believe that China will use the funds to finance specific projects, particularly in infrastructure.

“The Three Gorges dam is the most socially and environmentally destructive infrastructure project under construction in the world today,” Lammers says, adding that project proponents failed in several occasions to raise funds directly for the project. He says that environmental and human rights groups are now challenging any indirect methods of financing the Yangtze project.

(iii) Three Gorges Project to Receive More Fund

[TGP, 12/98] China will issue 10 billion yuan (US$1.2 billion) worth of enterprise bonds to finance the mega Yangtze dam project between now and 2003. About $240 million worth of the bonds is expected to be released in January 1999, according to a China Daily story.

The project currently is short of $3.01 billion to cover its total cost of $9.64 to the year 2003.

In addition, three national banks, the China Construction Bank, the Industrial and Commercial Bank of China and the Bank of Communications will provide commercial loans worth of $1.33 billion to the dam builder, the China Yangtze Three Gorges Project Development Corp (CTGPC) over the next six years.

CTGPC expects that foreign capital, especially export credits and foreign exchange loans, would be another source to cover the fund shortage.

(iv) $100 Million Wasted in Ertan Plant

[TGP, 12/98] An investment of $100 million goes into drain in Ertan Hydroelectric Plant, the second largest dam project behind the Three Gorges, after the central government imposed a ban on lumber trade at the upper reaches of the Yangtze River.

The planners of the Ertan dam, which is located in one of the major forest areas in Sichuan Province, invested about $1 billion in 1995 to build a mechanical pass for transporting timber. However, the $1 billion-passway becomes useless now since the state issued a new restriction on deforestation in the region following this year’s devastating flood in the Yangtze Valley.

In another report by Xinhua, Ertan Power Station started putting the first two generators into operation early this month.

Ertan Plant, located on the lower reaches of the Yalong River in Sichuan Province, is designed to have a combined capacity of 3.3 million kilowatts and cost $3.4 billion, with 1.8 billion from the World Bank.

(v) Relocation Falls Behind Schedule

[TGP, 12/98] About 49,000 people moved out of their homes this year to make way for the giant Three Gorges Dam. The number is below the planned relocation quota of 67,000 this year, according to an AFP story.

The construction of resettlers’ homes is also behind the schedule. By early December only 60 percent of new housing for this year had been completed, AFP quoted China Daily as saying.

The Three Gorges Project would require the removal of 1.13 million people. The relocation would be carried out in a series of moves and be completed by 2014.

Three Gorges Probe welcomes submissions. However, it is not a forum for political debate. Rather, Three Gorges Probe is dedicated to covering the scientific, technical, economic, social, and environmental ramifications of completing the Three Gorges Project, as well as the alternatives to the dam.

Publisher: Patricia Adams Executive Editor: Mu Lan ISSN 1481-0913

Categories: Three Gorges Probe

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