The world's largest hydroelectric project is expected to become a source of aid for people who have had to move to make way for its construction.

The Three Gorges hydro-power project will divert some of the cash earned from generating electricity to helping resettled residents, said Chongqing Vice Mayor Huang Qifan yesterday at the annual conference of the Chinese Economists Society held between June 24 and 27 in Chongqing.

By 2009, when the project is due to be finished, around 1.13 million people -- 85 percent of them from Chongqing and the rest from Hubei Province -- would have been relocated.

The huge reservoir will flow over their homes, fields and factories in an area covering 632 square kilometers, Huang said.

"The central government has allocated 60 billion yuan (US$7.2 billion) to move residents," Huang added. "But it is just as important that we try to ensure that resettled people can maintain good lives."

Huang did not specify the amount of electricity sales to be earmarked for resettled residents. But he said the amount of cash allocated last year was 200 million yuan (US$24 million) and will continue to surge as more turbines fire up at the Three Gorges Dam.

The dam generated 39.1 billion kilowatt-hours of electricity last year, according to Li Yong'an, president of the China Three Gorges Project Corp. It will pump out 84.7 billion kilowatt-hours a year when 26 generators are operational in 2009.

By then, up to 700 million yuan (US$84 million) is expected to be paid out annually from power sales to subsidize relocated people, providing training and helping them launch labor-intensive firms, Huang said.

He also said the central government has set up a special foundation to strengthen industrial development for resettled people.

Until 2010, 500 million yuan (US$60 million) will be given each year to needy enterprises operating in resettled areas, he revealed.

He added that Chongqing will allocate the funds to both public and private enterprises.

Enterprises in resettled areas will be exempt from customs tariffs if they import foreign equipment, a preferential policy available only in some coastal special economic zones, he said.

The measures will aim to help reduce unemployment in resettled areas from around 15 percent now to 6 percent in three to four years, he said.

The vice-mayor also said Chongqing has laid out detailed plans to improve and protect the environment in resettled areas.

Huang said Chongqing is gearing up for the Fifth Asia-Pacific Cities Summit, to be held from October 11 to 14.

(China Daily June 27, 2005)