WITH red banners flying and patriotic music in their ears, Chinese engineers have just completed a critical section of the biggest water project in the country’s history that will irrigate the arid northern plains and bring water to Beijing for the 2008 Olympics.

Not content with laying a railway across the snowcapped Tibetan plateau — the first train departed yesterday — or taming the floodwaters of the Yangtze with the Three Gorges dam, the Communist party now aims, quite literally, to turn the tide of Chinese history.

The “south-north canals” plan is the party’s greatest infrastructure undertaking and will take half a century to complete.

Gigantic tunnels will carry water beneath the course of the Yellow River, mega-dams will be constructed in the remote mountains of the west and a new canal system will run along the Grand canal waterway, constructed by slaves 2,500 years ago.

Three canals — east, west and central — will run for hundreds of miles from south to north to intersect with China’s four great rivers that flow from west to east: the Yangtze, the Yellow, the Huaihe and the Haihe.

In the past fortnight, engineers have finished two tunnels in central China’s Hebei province, each a mile long. They form the spine of a 184-mile canal, the central, that will carry water from three reservoirs in the Taihang mountains to the capital.

This waterway, costing a relatively modest £1.1 billion, was given priority because of the risk that Beijing could run short of water during the 2008 Olympics. It starts by diverting Yangtze water at the Shijiazhuang dam, which dates from the 1950s.

The total cost of the project, like its scale, is dizzying. The estimate is £32 billion, more than double the officially admitted cost of £14 billion for the Three Gorges dam.

The plan is to fund a fifth of the cost out of state spending and to split the rest between loans and revenue from water taxes collected in advance. Officials are studying whether private companies could operate parts of the system.

The initial stages are due to be finished for the Games — the city of Qingdao is said to be depending on them to host the Olympic water sports — and most of the central and east canals should be dug by 2010. The rest of the project will be daunting and long.

Inevitably, it is also controversial. Analysts commissioned by the World Bank have produced worrying estimates of pollution in the Han River if alterations to the dam at Shijiazhuang go ahead as planned.

There are also serious environmental concerns about the eastern canal, which runs the risk of becoming a conduit for effluent from thousands of factories, as well as polluted run-off from agricultural land. Officials promise that 295 pollution control stations will be built, but the protests are likely to get louder.

()Environmentalists argue that such large-scale tampering with water systems will also have untold ecological effects, changing the climate of entire regions.

Then there is the cultural cost. Aware of the furore that arose when ancient treasures were destroyed or submerged in the Three Gorges project, the government has ordered archeologists to analyse and save everything, from tombs to temples, that lies in the path of the canal builders.

The east canal will use parts of the ancient Grand Canal started in the 5th century BC and completed in the Yuan dynasty almost 2,000 years later.

Just as it did with the Three Gorges dam and the railway to Tibet, the party intends to override all objections in the name of national interest.

“Water resources are plentiful in the south while insufficient in the north. The water shortage problem in north China poses a big threat to the sustainable development of our society,” explained Zhu Ruixiang, of the Ministry of Water Resources, in a paper on the topic.

The figures disclosed in Zhu’s paper are alarming. North China has 64% of the cultivated land but only 19% of the water resources. The south has 81% of the water but only 35% of cultivated land. In a country where millions have perished through floods and famine down the centuries, these are politically dangerous statistics.

Nor can there be much doubt of the need for action. In 1997, Zhu pointed out, the Yellow River ran dry for 226 days. All over northern China aquifers are sucked dry by thirsty cities.

For China’s Asian neighbours — and its strategic rivals, America and Japan — the canal project could also address the rising fears of a future conflict over scarce water resources. However, some experts question whether the huge western canal, the most challenging of all, will ever be constructed.

“The western route concept is an incredibly audacious — even foolhardy — plan to erect mega-dams and dig 60-mile tunnels through remote and desolate mountains in western China at altitudes in excess of 13,000ft in areas that are frozen much of the year,” noted a study by the US embassy in Beijing. The cost of that alone could come to more than £20 billion.

But the lesson of the engineering feats of the past year is that nobody should underestimate the determination of China’s rulers to outdo the emperors in the splendour and scale of their building achievements.

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