Three Gorges Probe

Three Gorges fund could be diverted to massive South-North Water Transfer Scheme

Grainne Ryder, Stephen Thomas and Mu Lan
August 31, 2007
Money raised to build China’s Three Gorges dam could soon be diverted to a massive south-north water diversion scheme the building of which one senior official is calling “suicide.”

In a recent interview with South Wind Window, a popular Guangzhou-based magazine, Guo Shuyan, a former vice-director of the Three Gorges Project construction committee, said building the project’s western route would be “something like suicide” because the region’s environment is already “extremely fragile.”

Of all three diversion routes, the western route is the only one that would pump water from the Yangtze into the Yellow River valley, making it “the most difficult water diversion project in the world.” The difficulty is exacerbated by numerous unsolved engineering challenges, such as how to tunnel through high mountains in remote locations; modes for construction at high altitudes (well above 3000 meters); and how to transport water through a sub-zero environment.According to Mr. Guo, a significant portion of the Three Gorges fund could go to the south-north diversion project because it is having difficulty raising the financing.

The Three Gorges Fund was set up by the central government in 2003 to raise funds for the Three Gorges dam. A government audit of the US$15 billion project last year reported a “surplus” of US$5 billion after the fund collected US$7.77 billion from electricity ratepayers and earned money by selling six of the dam’s turbines to the Shanghai-listed Yangtze Power Company.

Originally, local governments were expected to put up financing for the massive diversion scheme first and then the central government would step in. But Mr. Guo, who now heads the National People’s Congress finance and economics committee, says that plan has “basically collapsed,” leaving the project authority scrounging for other sources of financing. Meanwhile, based on the history of the east and central routes, he expects construction costs to double.

So far the central government has raised US$1.6 billion for the project’s central route but still needs another US$18.4 billion to complete the project, and that’s not including the cost of water treatment, says Mr. Guo. The original budget was US$10 billion.

Similarly for the western route, diverting water from three Yangtze tributaries into the Yellow River was originally expected to cost US$37.5 billion. By Mr. Guo’s estimate, it could cost as much as US$75 billion.


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