Irrigation canals run through fertile fields, and dams rise from the ground. Since the beginning of this year, several major water conservancy projects including the Yaojiaping Water Conservancy Project in Hubei and the Sanba Reservoir in Sichuan have started construction, accelerating the construction of a national water network and improving the pattern of water resource allocation.
Last year, my country’s investment in water conservancy construction exceeded one trillion yuan for the first time. This year, the construction of the national water network has been further accelerated. In the first quarter, the investment in water conservancy construction across the country was 189.8 billion yuan, a year-on-year increase of 76%. From a local perspective, Guangdong, Hebei, Chongqing and other provinces and cities have announced water conservancy investment plans for 2023, and the investment amount has increased significantly compared with last year.
The National Development and Reform Commission stated that the national water network project has a large scale and high investment demand. It will take the national water network project as an important support area and maintain a reasonable intensity of investment within the central budget. At the same time, deepen the reform of investment and financing systems and mechanisms, actively guide various investment entities, especially private enterprises, to participate in accordance with laws and regulations, and promote and accelerate the construction of water network projects through market-oriented reforms.
Major water conservancy projects accelerated
Water is the lifeline, and the carrying space of water determines the space for economic and social development. A national water network with smooth circulation and orderly regulation can effectively improve the ability to allocate water resources and provide strong water support for economic and social development.
The large mechanical iron arm swung and the bucket broke the ground. On May 20, one of my country’s 150 major water conservancy projects and an important node project of the southern Yunnan water network – the main project of Zaodu Reservoir in Chongqing started construction. The total investment of the project is 10.123 billion yuan. It is expected that the diversion tunnel will be completed by the end of 2023 and meet the flow conditions. In 2027, the gate will be closed for water storage.
According to the person in charge of the Zaodu Reservoir Project Office, after the completion of the project, the flood control capacity of the Qijiang District where the main project is located can be increased from once in 20 years to once in 50 years. The newly added annual water supply is about 179 million cubic meters, and the south of Chongqing will form a multi-source water supply guarantee pattern.
In the project of diverting the river to fill the Han River at the Anle Estuary on the right bank of the Han River downstream of the Danjiangkou Reservoir Dam, the construction team is working non-stop.
As a follow-up water source project of the South-to-North Water Diversion Middle Route Project, the Diversion Project diverts water from the Three Gorges Reservoir area of the Yangtze River into the Han River. After the implementation of the project, the multi-year average north-to-north diversion volume on the middle line of the South-to-North Water Diversion Project will increase from 9.5 billion cubic meters to 11.51 billion cubic meters.
The relevant person in charge of the Ministry of Water Resources recently introduced that since the beginning of this year, the Ministry of Water Resources has comprehensively accelerated the construction of water conservancy infrastructure, and vigorously promoted the early start of multiple batches of projects. In the first quarter of this year, 7,239 new water conservancy projects were started across the country, 1,948 more than the same period last year. Eleven major water conservancy projects including Yaojiaping Water Conservancy Project in Hubei and Fenghuangshan Reservoir in Anhui were newly started, 6 more than the same period last year.
According to the recently released “National Water Network Construction Planning Outline”, in the next step, relevant departments will promote a number of major water conservancy projects around improving water resource allocation, water supply guarantee system, and river basin flood control and disaster reduction system. Among them, in the Yangtze River Basin, we will focus on promoting the construction of control hubs for tributaries such as the Qujiang River and Tuojiang River in the upper reaches, the Qingjiang River System in the middle reaches, and the Shuiyang River and Qingyi River in the lower reaches.
Water conservancy investment in many places has increased significantly year-on-year
Water conservancy projects are livelihood projects and important development projects, which play a significant role in stabilizing investment and expanding domestic demand.
According to data from the Ministry of Water Resources, last year, my country completed an investment of 1,089.3 billion yuan in water conservancy construction, an increase of 43.8% over 2021, and reached the trillion-dollar level for the first time. Investment in water conservancy construction continued to increase this year. In the first quarter, the country completed investment in water conservancy construction of 189.8 billion yuan, a year-on-year increase of 76%. Six provinces, including Guangdong, Yunnan, Hebei, Fujian, Zhejiang, and Sichuan, completed investments exceeding 10 billion yuan in the first quarter.
According to the 2023 water conservancy investment “mission statement” of various regions, the investment in water conservancy in Hubei, Hebei, Chongqing and other provinces and cities this year has increased significantly compared with last year. Among them, the scale of investment in water conservancy in Chongqing will reach 39 billion yuan, an increase of 50% over the previous year; the investment in the water conservancy industry in Liaoning Province in 2023 is planned to be 22.1 billion yuan, an increase of 15% over the previous year; the scale of investment in water conservancy in Hebei will reach 70 billion yuan Yuan, an increase of about 20% year-on-year; investment in water conservancy in Hubei Province strives to reach 62.5 billion yuan, an increase of 25% year-on-year.
“During the ’14th Five-Year Plan’ period, the national plan to complete water conservancy investment amounted to 5.2 trillion yuan, an increase of 57% compared with the actual investment amount of the ’13th Five-Year Plan’. In 2022, 35.7% of the progress has been completed, and the implementation is expected to be accelerated in the future.” Zhixin Investment Research Luo Huanjie, a senior researcher at the Academy of Macroeconomics, said.
According to the previous introduction of the Ministry of Water Resources, every investment of 100 billion yuan in major water conservancy projects can drive GDP growth by 0.15 percentage points.
Luo Huanjie said that water conservancy investment has a very obvious stimulating effect on related industries and overall investment. “The industry chain of major water conservancy projects has a strong driving effect, involving a large amount of earthwork development and concrete pouring, requiring the use of a large amount of bulk raw materials, machinery and electromechanical equipment, etc., and has a driving effect on the relevant upstream, midstream and downstream industry chains.” Luo Huanjie said.
Actively guide various investors to participate
Industry insiders pointed out that the large-scale construction of major water conservancy projects requires high investment. While increasing financial investment, it is necessary to give full play to the role of the government and the market and guide various investment entities, especially private capital, to participate.
The relevant person in charge of the Ministry of Water Resources introduced that last year, while striving to increase financial investment in water conservancy projects, they made full use of local government special bonds and policy-based development financial instruments, and actively promoted the development of the public-private partnership (PPP) model and water conservancy projects. Pilot infrastructure investment trusts (REITs). Throughout the year, 203.6 billion yuan of local government special bonds were implemented, an increase of 52%, and financial credit and social capital were 320.4 billion yuan, an increase of 78%.
“In recent years, the degree of diversification of investment entities in the water conservancy field has increased. However, due to factors such as low financial returns and long return cycles of water conservancy projects, the enthusiasm for social capital investment is still not high, and the proportion of investment is significantly lower than government investment.” Wu Youhong, director of the Investment System and Policy Research Office of the Investment Research Institute of the China Academy of Macroeconomics, said.
“The national water network project has a strong public interest, but at the same time it also has a certain operational nature, so it is necessary to give full play to the role of government investment and market financing, state-owned capital and private capital.” Zhao Chenxin, deputy director of the National Development and Reform Commission, said recently The press conference held by the State Council Information Office stated that the next step is to deepen the reform of the investment and financing system and mechanism, implement the water price standard and charging system, expand the scale of equity and debt financing, and accelerate the construction of water network projects through market-oriented reforms.
Wu Youhong suggested that policy support and regulatory services should be strengthened according to the functional attributes, investment scale, and profitability of different types of water conservancy projects. For water conservancy projects with operating income, social capital should be actively encouraged and guided to participate in investment, construction and operation through equity cooperation, franchising, and government-social capital cooperation. Actively explore the use of comprehensive development models, build a “fat and feed thin” mechanism, effectively integrate water conservancy projects with strong public welfare and low profitability with related industries with high profitability, and promote the integrated implementation of all-factor resources. (Reporter Wang Zixu)
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[Responsible editor: Shi Ge]