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The fund for the Three Gorges project has been raised through various channels, which guarantees the smooth construction and running of the project in the past six years, said Lu Youmei, manager of the China Yangtze Three Gorges Project Development Corporation.

Lu made the remark at a press conference held by the State Council Information Office this morning, which shed a light on the status quo of the project construction and resident relocation.

Lu noted that the total budget for the project was estimated at 90.09 billion yuan in 1993, which covers the relocation cost and does not include the factors of future price inflation and loan interest repayment. These factors considered, the budget would reach 203.9 billion yuan.

The total budget has been raised through four major sources, said Lu.

A state construction fund for the project was established and approved by the State Council in 1993. This fund accounts for half of the total budget, or 100 billion yuan, in the expected construction period of 17 years. Each year 4.5-5 billion yuan is used, added Lu.

The project will also receive bank loans. So far loan contracts with a total of 30 billion yuan involved have been signed between departments concerned and banks.

According to Lu, economic returns from the Gezhouba Power Plant in the reservoir area and the construction of the Three Gorges project have been generated, which accounts for 25 percent of the total budget.

In addition, the project will make use of a part of the export credit of the export countries for importing water turbine electricity generators, electricity transformation, voltage transformation station, and switches.

In light with the stable prices and sound economic performance of China, Lu held that the total budget of the Three Gorges project will not exceed 180 billion yuan.

Thanks to the favorable government policies and various ways of fund raising, the Three Gorges project will continue its smooth construction and will not affect other major projects in the country, the west-to-east gas pipeline, in particular, said Lu Youmei.

The project will have a sound capacity of power generation at low cost and a sound credibility to repay the debts when completed, said Lu.

(CIIC 10/25/2000)