Water Resources Vice-Minister Zhang Jiyao said part of the gigantic project will start by the end of the year.

"After nearly half a century of study and planning, we now can start putting the project the late Chairman Mao Zedong envisioned into reality step by step," Zhang said.

The project, mapped out as eastern, central and western diversion routes across nearly half of China, is aimed at forming a water network among the nation's longest rivers, including the Yangtze, Yellow, Huaihe and Haihe rivers.

Zhang said the government plans to invest 154.8 billion yuan (US$18.65 billion) in the first-phase project of the eastern and central line project, which will be finished in the next five to 10 years.

The whole project will be completed by 2050.

Zhang did not reveal the total investment required under the mammoth project, which is expected to cost more than the Three Gorges Project.

Experts said when the project is completed, the annual diversion will be equal to the annual run-off of the Yellow River, the second-longest river in China.

"The south-to-north water diversion project is a mega-project that is strategically aimed at realizing the optimal allocation of water resources," Zhang said.

The northern dry areas have one-third of China's population, gross national product, farmland and grain output. This requires the State to build the project as quickly as possible, Zhang said.

In China, water is scarce not only in landlocked areas, but also in some coastal regions.

A recent survey shows 400 of 600 major Chinese cities are suffering from water shortages, which cause economic losses of more than 120 billion yuan (US$14.5 billion) annually.

(China Daily November 26, 2002)