The Qingcaosha Reservoir, covering an area of 70 square kilometers, will provide enough water for 10 million people. The 16 billion yuan (US$2 billion) project is scheduled to be completed by 2010, according to Shanghai Chengtou Corporation, a government investment arm for urban construction.

With a size similar to nearby Changxing Island, the reservoir will be able to store 435 million cubic meters of water – enough for half of the city for 68 days.

The water is also cleaner than from the Huangpu River, which accounts for about 80 percent of the city’s water at present.

Officials said Qingcaosha’s huge capacity can help during the salt water tide from the East China Sea. The salt tide occurs in late autumn every year and creates water shortages as a smaller reservoir on the Yangtze is forced to shut when salt levels are high.

The Shanghai government began studying the Qingcaosha project 16 years ago knowing that economic development would eventually force the city to seek new sources of water.

Several fresh water sources were considered, including out-of-town sources in both neighboring Jiangsu and Zhejiang provinces, said Lu Xiaoru, general manager of Qingcaosha Raw Water Engineering Co, builder of the reservoir.

Lu said the reservoir is 50 times bigger in terms of capacity than the existing one on the Yangtze. It will provide sufficient supply until at least 2020. Further engineering, such as digging deeper into the ground, will be done if capacity falls short then.

The city’s water demand has grown in the past few years. Last summer, water use hit a record high of more than 10 million cubic meters a day, reaching peak capacity. The Qingcaosha Headwaters project is expected to become Shanghai’s largest source of raw water.