China's?Three Gorges Corp yesterday began construction of a dam that will flood the last free-flowing portion of the middle reaches of the Yangtze, the country's longest river.

The Xiaonanhai dam. [File photo]

A ceremony was held to commence early-stage preparation, including building a road and laying power lines and water pipes for the Xiaonanhai dam, said spokesman Zhu Guangming.

"Construction of the dam itself will begin only after we get final approval," Zhu said, declining to give cost estimates.

"The government will give due consideration to all aspects including environmental impact before issuing a permit."

The 30 billion yuan (US$4.75 billion) dam would be the last in a series of 12 dams along the Yangtze, the rest of which are all completed or under construction.

The series will stretch inland from the Three Gorges Dam, which has created an inland reservoir more than 600 kilometers long that has allowed the city of Chongqing to develop into an inland port. When completed, the Xiaonanhai dam is designed to produce 1.76 gigawatts, a fraction of the 22.50GW that the Three Gorges Dam will produce when it reaches full capacity.

The National Development and Reform Commission has issued preliminary approval.

China wants to raise installed power capacity by 470GW to 1,437GW by 2015? the largest in the world. At least 110GW of the new capacity will be from hydro power - equivalent to five Three Gorges hydropower projects. Current hydropower capacity is 216GW, also the world's largest.

The Three Gorges Dam is the world's biggest power project and was controversial well before it began construction in 1994.

Objections ranged from the destruction of rare species to the flooding of historic towns and displacement of millions of people, to concerns it would quickly silt up and lose efficiency.

In January, China's environment ministry told hydropower developers they must "put ecology first" and pay strict attention to the impact of their projects on local rivers and communities.

The Xiaonanhai dam is decried by environmentalists because it will flood a nature reserve designed to protect about 40 species of river fish.