$ 77 Billion USD Water Transfer Project Has Failed | China's Mega Project Rotten Ended | Water Canal

The South-North Water Transfer Project, known as the largest inter-basin water transfer project in human history, has once again sparked public concern and debate. Many question that this $77 billion U.S. dollar megaproject has failed. The main reason for controversy is the actual water transfer capacity of the project, which can only reach one-third of the design capacity. On July 29th, China's Minister of Water Resources Li Guoying published an article saying, Take water conservation as the fundamental solution for the supply problem of water receiving areas, and make long-term efforts to conserve water. Apparently, water receiving areas are referring to areas receiving water from the South-North Water Transfer Project. This statement by Li Guoying points out the essence of the South-North Water Transfer Project. Areas that need water from the project cannot rely on the project for water supply, and the only solution is to conserve water to reduce demand. The success or failure of a project needs to be analyzed from several aspects, such as whether the project has achieved the designed function, its impacts on the environment, operating economics, and more. These are all important factors that need to be analyzed. The South-North Water Transfer Project is a large-scale water conservancy project in operation in China, transporting water resources from the Yangtze and Huai River basins to north and northwest China. The project crosses four major river basins, the Yangtze River, the Huai River, the Yellow River, and the Hai River, and consists of three water transfer routes, the East Route, the Central Route, and the West Route. This project is classified as one of the world's largest megaprojects. The East Route Phase 1 project was officially commissioned on November 15, 2013. The Central Route Phase 1 project was officially commissioned on December 12, 2014, and the West Route project is still undergoing preliminary survey work. According to the general layout of the South-North Water Transfer Project published on the Chinese central government's website, by 2050, the total water transfer volume of the three routes will be 44.8 billion cubic meters per year, 14.8 billion on the East Route, 13 billion on the Central Route, and 17 billion on the West Route. State media in mainland China reported that by the end of November 2014, the State Council's South-North Water Transfer Office had issued a total investment of $38.1 billion for the first phase of the East and Central Routes. On April 7, 2015, He Jinping, then director of the office, said in an interview with mainland media Caijing National Weekly that the investment in the first phase of the South-North Water Transfer Project was $48 billion. With investments in the supporting projects made by related provinces considered, the total investment in the Phase 1 project was more than $77 billion. The East Route Project's Phase 1 main route is 1,466 kilometers long. It is designed to pump water from the Yangtze River downstream in Yangzhou City to supply water to the north, mainly to Jiangsu and Shandong provinces, and even as far as Tianjin City. Because the terrain is high in the north and low in the south, a total of 13 pumping stations are set up along the line to pump water step by step, with a total pumping lift of 65 meters. The design of the project's first phase is to pump 8.8 billion cubic meters of water from the Yangtze River per year. On May 20, Chinese official media reported that since the opening of the East Route's first phase on November 15, 2013, the project has successfully completed 8 annual water transfer tasks. A total of over 5.3 billion cubic meters of water has been transferred to the north, which is about 0.7 billion cubic meters per year. The Central Route Project draws water from the Danjiangkou Reservoir, located in the upper reaches of the Han River, which is the main tributary of the Yangtze River. It supplies water through an elevated water supply channel using artesian flow, and eventually reaches Beijing and Tianjin. The total canal length of the Central Route Water Transfer Project is 1,246 kilometers. According to the Regulations on the Management of Water Supply and Consumption of the South-to-North Water Transfer Project, the average volume of water transferred via the Central Route is 9.5 billion cubic meters per year. On July 19 this year, Chinese official media reported that as of July 19, 2021, the total amount of water transferred through the first phase of the Central Route has reached 40 billion cubic meters. That means the average annual water transfer is about 5.7 billion cubic meters. According to data reported by Chinese official media, the water transfer volume of the first phase of the East and Central Routes can only reach one-third of the designed capacity. Wang Guangqian, an academician of the Chinese Academy of Sciences who participated in the planning of the West Route Project, said in a media interview in March this year that the main part of the West Route would require an investment of about 171 billion U.S. dollars. The final proposal has not yet been finalized. From the perspective of environmental impact, water conservancy expert Wang Weiluo pointed out that the South-to-North Water Transfer Central Project spans four major river basins, the Yangtze, Huai, Yellow, and Hai River. Most of these rivers in these basins flow from west to east, while the South-to-North Water Transfer Routes are from south to north. In order to reduce the cost of the South-to-North Water Transfer, only 200 rivers were left and nearly 600 other rivers disappeared. But when heavy rain comes, these disappeared rivers were filled with water again, thus flooding ensues. Wang Weiluo wrote in an article that the Central Route plans to transfer 10 billion cubic meters of water from the Danjiangkou Reservoir to the north every year. The water from the Danjiangkou Reservoir comes from the Han River, so the downstream of the Han River Basin will be short of 10 billion cubic meters of water every year. This may cause the Han River to dry up, and the amount of water entering the Yangtze River will be significantly reduced. The massive pumping of water from the Yangtze River by the East Route Project will result in a large reduction in the amount of water entering the East China Sea, which would cause serious backflow of seawater and saltwater intrusion. Artificially raising the water storage level of lakes along the East Route will also increase the flood hazard. Rivers and lakes in their natural state have high and low water levels, and the groundwater level in the surrounding areas also rise and fall to achieve the exchange of old and new material and energy. As the water transmission route and the lakes along the route are in a state of high water level all year round, it will cause soil glazation and swampiness, and damage the ecology of the area. Salinization will also occur in the areas where water is imported. In addition to environmental issues, the South-North water transfer also poses a threat to people's lives and property in some areas. Recently, there is a lot of evidence that the mega-flood in Zhengzhou and Henan Province last month was related to the Central Route. The Central Route passes through Henan Province to supply water to Beijing and Tianjin. Ensuring the safety of Beijing's drinking water is the biggest political mission for all levels of officials, and is the highest priority for flood prevention. Therefore, the authorities deployed a large number of PLA officers and soldiers to the scene of the Central Route's flood control and rescue, where they blew up other river dams to release floodwater, repaired the dams of the water transfer project, etc. The purpose was to ensure the safety of the Central Route's main canal, and that the water in the Central Route's main canal would not be On July 20th, a huge flood occurred in Zhengzhou, causing huge losses to people's lives and properties. Officials said 292 people died in Zhengzhou due to the flood, and more than 400,000 cars were damaged by floodwater. Economist Cheng Xiaonong published an article arguing that the disaster in Zhengzhou was related to the South-North water transfer project. Changzhuang Reservoir released water without warning, which caused Zhengzhou city to be flooded. Under normal circumstances, before and after the red flood warning is issued, reservoirs around Zhengzhou should release water as early as possible before the onset of the rainstorm to free up the reservoir capacity in preparation to receive the amount of forecasted rainfall. But Zhengzhou city did not do so. Because these reservoirs are water storage reservoirs for Zhengzhou's water supply, the water in these reservoirs was bought from the South-North transfer project. Therefore, the release of water directly leads to financial losses. On average, Zhengzhou takes 400 million cubic meters of water from the South-North water transfer project each year, which costs about 45 million US dollars. The municipal officials hesitated to release the water from the reservoir when it faced heavy rainfall. It was only when the dam was about to break that the water was released, resulting in a major flood. Liu Sumei, Xu Lihua, and many other Chinese seismologists believe that raising the Danjiangkou dam will induce magnitude 4 or higher earthquakes, which will seriously endanger the lives of the surrounding people. Engineer Fan Xiao said, the main problem of the South-North water transfer project is water pollution. It passes through the Huaihe river basin, which is one of the most polluted areas of China's waters. It's difficult to put the polluted water to use after it is transmitted. Reuters reported on October 13, 2014, that not only is the Danjiangkou reservoir, where the central route project draws its water, is heavily polluted, the Huaihe river basin in Henan province, through which it flows, is an area with high cancer rates. Garbage flows on the surface of these reservoirs, and urban sewage from Ziyang county in Ankang city, Shanxi province is discharged directly into it without being processed. Stretching throughout several villages in the north of the river, the South-North water transfer project's rainfall diversion channel has become a sewage ditch. The foul water is dark green and emits an odor, and is less than 10 meters away from the South-North water transfer canal. There is also the issue of immigration and resettlement. The construction of the Danjiangkou reservoir alone has forced more than 400,000 people to move away. As for the economic benefits of the South-North water transfer project, several experts, including Wang Weiluo, have made calculations. We are unable to obtain the latest operating data of the project, so we have compiled the results of Wang's calculations to share with you. According to the water supply price for the central project of the South-North water transfer announced by China's National Development and Reform Commission on December 26, 2014, the price varies from 3 to 36 U.S. cents per cubic meter from Henan to Beijing, depending on the distance of water transfer. For simplicity of calculation, 36 cents per cubic meter is used for all of them, and the price of water supply for the East Route project is also calculated at 36 cents per cubic meter. The total gross revenue from water sales for the four years from 2014 to 2018 is 8 billion U.S. dollars, or an average of 2 billion per year. The investment in the South-North water transfer project is 38.1 billion U.S. dollars. From 2014 to 2018, the average annual gross revenue from water sales is 5% of the investment. As a rule, the average annual growth revenue of a project should be at least 12.5% of the investment, with a minimum of 10% in special cases. Therefore, this project does not meet this minimum requirement. The growth revenue from water sales must also be deducted from operating costs, such as electricity, managerial salaries, etc., project maintenance costs, and water source fees paid to the water source government. At 50% of the gross revenue from these costs, the average annual net revenue from water sales is 1 billion U.S. dollars, or 2.5% of the investment. The official price inflation index in China is between 2 to 3%, and the average real estate borrowing interest rate is 5% or more. So, in terms of economic efficiency, the South-North water transfer project is a great failure. However, officials believe the economic benefits are good. Wang An'an, chief planner of the Ministry of Water Resources, said at a State Council Information Office briefing on December 6, 2018, I believe that in the coming period of time, its economic benefits may be even better than what we had expected in the earlier stages. Wang Weiluo points out that this is because the investment of 38.1 billion U.S. dollars in the South-North water transfer project comes from the National Major Water Project Fund. The fund is hidden in the electricity bills paid by each citizen. This means that the people are paying for the entire investment of the project. Therefore, the project has neither the problem of paying interest, nor the problem of paying back the capital, nor the burden of returning to the people the National Major Water Project Fund they had paid. The 1 billion U.S. dollar annual net income of the project goes directly into the pockets of the interest groups, for whom the economic benefits of the project are even better than expected, but is costing the average citizen. So the question is, there are so many experts and scholars in China, why do they keep collectively silent on the South-North water transfer project? It has to do with the impact the Three Gorges Dam project has had on Chinese academia. In 1986, the Ministry of Water Resources organized 412 experts to evaluate the Three Gorges project. As a result, those experts who signed the report on the Three Gorges project eventually became recognized as experts with special contributions to the country, and many became members of the Academy of Engineering or the Academy of Sciences. None of the nine experts who did not sign the report, including Huang Wanli, a famous water engineering expert, became academicians. Therefore, through the example of the Three Gorges project, Chinese scholars had a clear understanding that any expert who dared to oppose the decision to launch the project by those in power would be tantamount to cutting off his or her future path of development, and it would be impossible for him or her to become an academician or to get research funds from the government in the future. Therefore, the academic community has remained silent on the South-North water diversion project. As for those local government officials in areas that the project is passing through, as long as the state invests in the project, the local GDP data will look good. They will also get benefits and job opportunities will be created. If they support the project mandated by top officials, they may get promotions. If not, the consequences are that they will likely lose their positions. Those who support the project will be assigned to the position. Either way, that the project must be constructed is something that cannot be changed. For design and construction companies, a project as big as the South-North water transfer project is certainly a good business opportunity. The project, known as the largest water transfer project ever undertaken by mankind at a cost of 77 billion US dollars, was thus completed. The public commented that the project embodies the revolutionary sentiment of man will win against heaven.