It was the financial needs of projects like the Three Gorges Dam which provided the impetus for creating such a mechanism for commercially unviable projects. Each time the issues were withdrawn because the project was unattractive to investors. The question is not if the Three Gorges Dam will lose money, but how much. The figure of Rmb 90.1 billion cited in your January 1997 prospectus is out of date. By 1993, cost estimates had reached Rmb 120 billion and official estimates are now as high as Rmb 360 billion.
Unofficial estimates go much higher.
Estimates are likely to increase even further. Because actual construction methods of this extremely complex project have yet to be determined, construction cost estimates to date are highly speculative, as are estimates for compensation for the 1.9 million people who will be forcibly resettled to make way for the dam and reservoir. Actual costs may never be known as independent audits are seldom performed for many of China's banks, much less projects like the Three Gorges. The Yangtze River's heavy silt load and the competing operational objectives of hydropower production versus flood control of the Three Gorges project will have a significant impact on the claimed benefits. The Yangtze River is the second most silt-laden river in the world.