Zhang Jiyao, vice-minister of water resources, said yesterday that the money would come from an issue of State treasury bonds.

    Zhang said funds earmarked for the projects, including flood control and water supply facilities, will be significantly more than 30 billion yuan (US$3.61 billion).

    About 80 per cent of such State bond investment has been pledged by the central government to the construction of large public water infrastructure, Zhang added.

    The message was delivered at a national conference on the planning and programming of water conservation projects.

    Investment priorities will be the protection and rehabilitation of water resources.

    The State will also continue the massive construction of flood-control facilities that were launched following the devastating floods in 1998 which killed more than 4,000 people.

    Zhang urged those officials responsible for planning and programming the project to complete key facilities based on the South-to-North Water Transfer project, which was started in December.

    The project aims to divert water from the Yangtze River to China's parched northern regions, throwing a lifeline to the fast-growing economy and relieving the acute water shortage in key cities such as Beijing and Tianjin.

    The central government has poured a record 178.6 billion yuan (US$21.6 billion) into water conservation projects over the past five years - 2.3 times the total investment budgeted between 1949-97.

    Jiao Yong, director of the ministry's department of planning and programming, said funds earmarked for water supply projects increased from only 12.7 per cent of the total in 1999 to 29.3 per cent last year.

    Plans for rehabilitating regional ecosystems that have suffered degradation will also be carried out in line with other water diversion projects started in arid-prone northwestern and western China.Enditem