Three domestic insurers Thursday inked a 10 billion yuan (US$1.2 billion) insurance contract in Beijing with the China Yangtze Three Gorges Project Development Corp for the country’s largest power plant. The three companies will jointly underwrite the construction insurance for the installation of 14 hydropower generating units on the Three Gorges’ left bank and the insurance for the transportation of transformers and gas insulated systems. The People’s Insurance Company of China (PICC), the country’s largest property insurer, will take 50 per cent of the policy while China Pacific Insurance Company handles 30 per cent and the China Ping An Insurance Company the remaining 20 per cent. The construction of the 203.9 billion yuan (US$24.6 billion) Three Gorges project started in 1993. By the end of last year, 59.1 billion yuan (US$7.1 billion) had been invested in the dam and 14.74 million cubic metres of concrete poured. The State is planning to invest 13.1 billion yuan (US$1.57 billion) in the project this year, with the dam and a hydropower plant on one bank of the Yangtze River expected to be completed in 2003. The hydroelectric project will have an installed capacity of 18,200 megawatts and generate 84.7 billion kilowatt-hours annually upon completion in 2009. Chinese insurance companies have been involved in the project ever since the start of the construction. Not counting the latest deal, PICC holds 17 billion yuan (US$2.04 billion) worth of insurance contracts connected with the project, accounting for 70 per cent of the total. As the dam builders are paying top priority to construction quality, the insurance risk for the dam project is actually small and the compensation rate is quite low, said Li Yong’an, vice-president of the Three Gorges construction company. Tang Yunxiang, president of PICC, said insurers’ involvement in the Three Gorges provides reliable risk control for the project and creates a model for other key State construction projects for the introduction of insurance into their risk management mechanisms.