China Three Gorges Project Corp. (CTGPC), the company responsible for building the mammoth Three Gorges Dam, signed a contract on Saturday to purchase the 12 hydropower generating units and accessories for the dam's right bank section.

Unlike the 14 generators installed on the left bank of the dam, which were all produced by foreign companies, eight of the 12 went to two leading Chinese machinery manufacturers. The generators are worth a combined 4.54 billion yuan (US$546 million).

Harbin Electric Machinery and Dongfang Electric Machinery each won contracts for four, according to the buyer.

"This is the first time for domestic enterprises to design and produce 700,000-kilowatt generators independently, marking a milestone in the history of China's electric machinery production," said Li Yongan, president of CTGPC.

Alstom Power Hydro of France won the other four contracts in an international bid, in which Voith Siemens Hydro Power Generation also took part.

The first four of the right-bank generators are expected to be operational in 2007. The Three Gorges Project, the world's largest hydropower plant, started to spin out electricity last year. Six of the generators on the left bank are now in operation, while the rest are scheduled to start running within the next two years.

Through an international tender in 1997, CTGPC bought the 14 generators for the left bank, worth a combined value of US$740 million, from global giants like ABB and Alstom.

The two Chinese firms were subcontractors, winning 31 percent of the deal.

As part of the purchase order, the foreign firms agreed to transfer related technologies to China for a total of US$18 million.

The transfer has significantly contributed to the technological advancements of the domestic hydropower manufacturing industry and enabled the CTGPC to reduce its procurement costs.

"We have completely grasped the technologies, and are now capable of independently designing and producing 700,000-kilowatt generators,” Wu Weizhang, president of Harbin Electric Machinery, told China Daily during the signing ceremony.

"The significance [of the contracts] to us is not how big a share it is in our business. It symbolizes a landmark improvement in our international competitiveness, that we now have the ability to produce the largest hydropower generators in the world," he added.

Alstom stands as the biggest supplier of generators for the Three Gorges Dam, having won eight contracts for the left bank.

"Alstom's model was the best in the experiment, and it had a competitive price, that's why we chose it," CTGPC's Li said about the international tender for the four right-bank generators.

The Three Gorges Project's power output totaled 8.6 billion kilowatt-hours last year, helping to alleviate power shortages in eastern and central China.

The CTGPC said it aims to generate 50 billion kilowatt-hours this year, exceeding the 46.3 billion kilowatt-hour target set by the government.

Upon its completion in 2009, the project, which also plays a critical role in flood control, will be able to generate 84.7 billion kilowatt-hours annually.

(China Daily March 29, 2004)