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Project Management - Major Research Project

Submitted to Prof: Purna Chandra Rath

By Sec – Z Group - 10
Bibhu Prasad Nayak U113196
Swayambhu Dutta U113236
Arjun Agrawal U113191
Prateek Saraf U113215
Stalin Mohapatra U113233
Varun Kumar Pandey U113239
Introduction Requirement Challenges Planning

What is “Three Gorges Dam” ?

The Three Gorges Dam is


a hydroelectric dam that spans
the Yangtze River by the town
of Sandouping, located in Yiling
District,Yichang, Hubei province, Chi
na. The Three Gorges Dam is
the world's largest power station in
terms of installed capacity
(22,500 MW).

The Chinese Government regards the project as a historic engineering, social


and economic success, with the design of state-of-the-art large turbines, and
a move toward limiting greenhouse gas emissions.
Introduction Requirement Challenges Planning

Dam Site : Upstream on Yangtze River

Compositions & Dimensions:


Made of concrete and steel
The dam is 2,335 m (7,661 ft.) long and the top
of the dam is 185 meters (607 ft.) above sea
level.
The project used 27.2 million cubic meters Steel Used
(35.6×106 cu yd.) of concrete (mainly for the dam
wall), 463,000 tonnes of steel and moved about 3
102.6 million cubic meters (134.2×106 cu yd.) of Gorges = 63 X
earth. Dam
The concrete dam wall is 181 meters (594 ft.)
high above the rock basis.
Introduction Requirement Challenges Planning
Introduction Requirement Challenges Planning

HOW BIG IS THE PROJECT?


Why is a dam this large Installed Capacity (MW)
required? 25000
20000
•Flood Control– expected to 15000
22500

reduce the severity of flooding by 10000 14000 13860


5000 8850 8370
90% 0
•Navigation- Allow the passage 3 Gorges Dam Itaipu Dam Xiluodu Dam Guri Dam Tucurui Dam

of 10,000 ton ships to Chongqing Installed Capacity (MW)

(earlier limited 5,000 ton ships);


allow ships to sail throughout the Concrete Used (in million cubic meters)
30
year. 25 27
•Energy Production- 20
Hydroelectric power generation 15
10
will generate 15% of China's 5 9
0.3
electricity; Saving an estimated 0
3 Gorges Dam Grand Coulee Dam Burj Khalifa
50 million tons of coal.
Concrete Used (in million cubic meters)
Introduction Requirement Challenges Planning

• Massive floods in Yangtze river every 10 years, for last 2000 years.
Casualties
1954
30000
1911
100000
1935
145000
1931
3700000

• Meeting China’s huge energy demands


Energy Demands (in Quadrillion Btu)
250
220
200 197
150 160

100 100
50 40
25
0
1990 2000 2010 2020 2030 2040
Introduction Requirement Challenges Planning

The Stakeholders
For Against
The Chinese Government People forced to Relocate

Shipping Companies
River Dolphins

Dam Builders
Environmentalists
Hydro-Power Companies

Archeologists
Clean Energy Advocates

People loosing lives due to flooding Geologists


Introduction Requirement Challenges Planning

Pros Cons
• Loss of fish and
• Flooding of good farmland
• Controls the Yangtze river floods,
• Extinction of the river dolphin
saving lives and homes
• Destruction of archeology sites
• Major source of renewable power,
• Relocation of 1.3 million people
replacing coal as a source of power
• May be triggering landslides,
• Made it possible for ships
endangering millions of people
(commercial and recreational) to
• Rise in water born disease from
travel much further inland
polluted water
• Tourist attraction
• Weight of the reservoir may trigger
earthquakes
Introduction Requirement Challenges Planning
Environmental Impact
• Project has a great influence on the environment and ecology of the
reservoir area and the Yangtze River.
• Biggest concern is the pollution of the reservoir - After the water storage,
due to the steady state of the fluent, the contaminant cannot down rush in
time and store up in the reservoir, which would deteriorate water quality
and cause refuse floating, and probably trigger the epidemic.
Migration Problem
• Migration problem is the biggest difficult faced by the project - The fund
for migration covers 45% of the total investment. After the water storage,
about 129 cities and towns including Wanxian and Fuling are flooded.
• The migrants surpass 1200,000, relating to 20 cities. Many migrants are
building their new homes around the dam area.
• But the current situation is that though the infrastructure construction is
rapid, the industry develops slowly, a great number of enterprises went
bankrupt, the unemployment rate is high and the income of peasants falls,
which has brought a lot of social problems. Precious Stone Fortress is partly submerged in the
Landscape Loss water.
• As the water storage of the Three Gorges Dam, the rising Yangtze River
has flooded a part of the landscape. Scenery changes a lot compared
before the dam construction.
• It is a great pity that so many scenic sights have forever disappeared.
The experts have tried their best to save them as much as possible. They
moved some to the new sites, transferred some to museums or took
photos as a reference to later reproduction.
Introduction Requirement Challenges Planning
Ecological Problem:
Fishes cannot normally pass the Three Gorges, and thus their living habits and heredity
will change.
After the finish of the water storage, over 560 kinds of land rare plants will be flooded.
A) Endangered Treasures : Among the potential tragedies of the Three Gorges Dam project
are over one thousand sites of archaeological and historical importance that will be
submerged and lost forever upon completion of the dam like
•Ba Civilization: Artists and Metal Workers
•Ancient Fossils at Dragon Bone Cave
•Shibaozhai Temple
B) Endangered Species
The ancient plank road is
The baiji dolphin, the ancient river sturgeon and the finless porpoise depend on the Yangtze submerged in the water.
for their survival. The population of Siberian cranes in Poyang Lake will also

Earthquakes
•The Three Gorges area is affected by many small earthquakes yearly,
but most range from 1-2 on the Richter scale.
•However, once the dam is completed, these levels are expected to rise to
earthquakes that will be 5-6 on the Richter scale.
•While technology allows the dam to tolerate earthquakes that are 7-8 on
the Richter scale, if there is any miscalculation, there would be complete
disaster.
Introduction Requirement Challenges Planning
Sediment Problem
It is measured that the river sediment concentration of the upper stream is about
1.2kg per cubic meter.
The total sediment passing the dam site is above five hundred million a year.
Before the dam project, the mud and sand deposited largely in Jingjiang River,
which has lifted the water level and menaced the safety of Jianghan
(Yangtze River and Hanjiang River) Plain and Dongting Lake Plain.

Erosion and the Yellow Sea


Erosion is also a key factor in the problems of Three Gorges. Many dams
around the world have provoked a problem with coastal erosion, and Three
Gorges doesn't seem to be heading in a different direction. The problem starts
when clear water is forced out of the river mouth and carried along the coast.
This clear water erodes the coast and this erosion can cause problems far
beyond the boundaries of Three Gorges, and could also cause serious problems
along China's coastal cities and towns.

Agricultural Production
Although silt deposits are dangerous to the health of a river and the
usefulness of a dam, silt itself is necessary. Silt is a naturally occurring
phenomenon, and consists of soil, gravel and rocks, mostly coming from soil
erosion on land.
Introduction Requirement Challenges Planning
Introduction Requirement Challenges Planning
Table: Summary of the arguments in favor of and against the dam
Issue Criticism Defense
The dam will far exceed the official cost estimate, and the The dam is within budget, and updating the
Cost investment will be unrecoverable as cheaper power sources transmission grid will increase demand for its
become available and lure away ratepayers. electricity and allow the dam to pay for itself.
Relocated people are worse off than before and their human 15 million people downstream will be better off due
Resettlement
rights are being violated. to electricity and flood control.
Water pollution and deforestation will increase, the coastline Hydroelectric power is cleaner than coal burning and
Environment will be eroded and the altered ecosystem will further endanger safer than nuclear plants, and steps will be taken to
many species. protect the environment.
The reservoir will flood many historical sites and ruin the
Local culture and Many historical relics are being moved, and the
legendary scenery of the gorges and the local tourism
natural beauty scenery will not change that much.
industry.
Shipping will become faster, cheaper and safer as
Heavy siltation will clog ports within a few years and negate
Navigation the rapid waters are tamed and ship locks are
improvements to navigation.
installed.
Technological advancements have made hydrodams obsolete, The alternatives are not viable yet and there is a
Power generation and a decentralized energy market will allow ratepayers to huge potential demand for the relatively cheap
switch to cheaper, cleaner power supplies. hydroelectricity.
Siltation will decrease flood storage capacity, the dam will not The huge flood storage capacity will lessen the
Flood control prevent floods on tributaries, and more effective flood control frequency of major floods. The risk that the dam will
solutions are available. increase flooding is remote.
Introduction Requirement Challenges Planning

The construction started December 14 1994. The dam was expected to be fully operational in 2009,
but additional projects, such as the underground power plant with six additional generators, are
expected to delay full operation until mid-2012.The ship lift is expected to be completed in 2014.

Political unrest again


The project lost support
delayed construction until
First proposed in 1919, the during the China Civil War
1979, when the State By 1992 the National
Three Gorges Dam Project in 1947, but after the
Council approved People’s Party approved
has faced many challenges devastating Yangtze River
construction because the Three Gorges Dam
throughout the plan’s floods in the 1950s, the
growing economy project
development. idea was reintroduced to
demanded more electric
the government.
power.

Timeline: of 3 Gorges Dam

In 1932 the Construction In 1958, Mao Zedong In early 1989, the State
Committee of Sun Yat-Sen pushed for support; he Council agreed in March to
The project was due to be
created the initial plan for a wanted China to have the suspend construction plans
completed in 2009.
much smaller dam on the largest hydroelectric dam in because of international
Yangtze River. the world. pressures.
Introduction Requirement Challenges Planning

Gestation of the Project

 As early as 1919, in his article entitled A plan to develop


industry, Sun Yat-Sen mentioned the possibility to build
a series or large dams in the Yangtze with the purposes
of flood control and electricity generation
 During the 1930s, under the Guomindang Party
government, several studies were undertaken to check
the feasibility of constructing a large dam in the upper
reaches5 of Yangtze River.
 However, the deep economic crisis and the upsurge of the
 In 1944, an American dam expert of the US Bureau of
Chinese civil war caused the abandonment of the project
Reclamation, J.L. Savage, was invited to do field
by the government of Chiang Kai-Shek in 1947 (Dai,
research in order to survey the location of the future
1994).
dam and to draft a preliminary project.
 A severe series of floods in the Yangtze River in 1949
 Two years later, the Republic of China signed a contract
with the US Bureau of Reclamation, to design a large made the recently established communist government
dam in the Three Gorges area (see Fig. 2), and more strengthen its politics towards the great hydraulic projects
than 50 Chinese technicians were sent to the United to control floods, planning the massive construction of
States to participate in the design. large dams, dikes and sluices for the forthcoming decades.
Introduction Requirement Challenges Planning

Feasibility Study Diagram of 3 Gorges Project


Financing Construction Cost & Time Completion

Fund Requirement Amount Fund Sources

Construction $ 9.5 Billion • The Three Gorges Dam Construction Fund


• Revenue from Gezhouba Power Plant 65%
Relocation of Affected Residents $ 10 Billion
• Policy loans from the China Development Bank
Interest on Borrowings $ 2.3 Billion
• Loans from domestic & foreign commercial bank
Total $ 21.8 Billion
• Corporate bond
*2008 estimates
Source: China Daily Business Weekly

Chinese Financiers
Year Bank Assistance
1996 China Development Bank Ten-Year $3.6 billion loan to the Three Gorges project

1999 China Construction Bank Loan of $483 million to China Three Gorges Project Development Co

2003 China Construction Bank Underwriter for Yangtze Power’s issue of $194 million worth of one-
year bills on the interbank market
2003 China Construction Bank Underwriter for Yangtze Power’s issue of $331 million worth of 365-
day debt papers in the interbank market
2003 Consortium of 10 Banks Loan agreements with Yangtze Power for $404 million

2003 China Development Bank Loan agreement with Yangtze Power for $603.9 million to purchase
generators
Financing Construction Cost & Time Completion

Year Bank Assistance


Consortium of 9 Banks Providing a total of US$5.86 billion loan to finance the South-
North Water Diversion (SNWD) Project. The SNWD project
includes three water diversion routes connecting the Yangtze
River, the Huai River, the Yellow River and the Hai River, bringing
water to drought-hit regions such as Shandong Province, the
municipality of Tianjin, and Beijing.
2003 Minsheng Bank Yangtze Power signed a five-year agreement. Scope: cooperation
patterns, loan granting, the collection of electric charges, personal
finance and financial innovations.

China Development Loans to Harbin Electricity Equipment Group and Harbin Power
Plant Co. Ltd amounting to $84 million for the reconstruction of a
Bank
hydroelectricity generator.
2000 World Bank Approved a $200 million loan to Chongqing municipality in June
2000 for a US$500 million project (completion expected
December 2006) that includes wastewater treatment facilities and
solid waste collection services in areas impacted by the Three
Gorges dam.
Financing Construction Cost & Time Completion
International funding for the Three Gorges Dam project is a major factor in its construction. Companies and banks from
Canada, France, Germany, Switzerland, Sweden, and Brazil have all played a role in financing the dam.

BRAZIL Banco Nacional de Desenvolvimento Economico e


$202 million loan to finance the purchase of turbine-generator sets from GEC-Alsthom consortium.
Social (BNDES)

CANADA EXPORT DEVELOPMENT CORPORATION $23.5 million loan to the People's Construction Bank of China for Fuller-F.L. Smitdth Canada's contract
(1994).
$37.5 million loan to financeAGRA Monenco's contract (1995).
$153 million loan to financeGE Canada's contract (1997).

FRANCE Banque Nationale de Paris (& Banque de Paris et des


$94.815 million loan to finance GEC-Alsthomcontract (1997).
Pays Bas, Midland Bank SA)

GERMANY Kreditanstalt für Wiederaufbau (KfW) (and three


commercial banks, Deutsche Genossenschaftsbank,
Dresdner Bank, and Commerzbank) $271-million loan for the purchase of Siemens andVoith turbine-generator units (1997).
Hermes Kreditversicherungs AG $40 million export credit guarantee to Siemens andVoith.(1997).
Kreditanstalt für Wiederaufbau (KfW), and three $80 million loan for the purchase of Siemenstransformer equipment (1999).
commercial banks, Deutsche Genossenschaftsbank, $52.9 million export credit guarantee (1999).
Dresdner Bank, and Commerzbank
Hermes Kreditversicherungs AG

JAPAN Export Import Bank of Japan (JEXIM) and Ministry of


Offered a line of credit for Japanese firms bidding on contracts for electrical generating equipment (1996).
International Trade and Industry (MITI)

SWEDEN Svensk Exportkredit (and Société Générale of France,


Australia-New Zealand Banking Group, and Credit $351 million loan for the purchase of ABBequipment (1999).
Agricole Indosuez)

SWITZERLAND Bundesrat Exportrisikogarantie $143.1 million export credit guarantee for the purchase of ABB turbine-generator sets (1997).
Geschäftsstelle für die Exportrisikogarantie (ERG) Export credit guarantee for the purchase of ABBequipment (1999).
Financing Construction Cost & Time Completion

P1 : 1993-1997 P2: 1998-2003 P3: 2003-2009

Phase Year Construction Stage Water


Level
(m)
Preparat 1993 Initial Planning 66
ory
Phase
Phase-I 1994 Earthmoving starts; inauguration ceremony. 66
(1994- 1995 Concrete longitudinal cofferdam building 66
1997) starts; resettlement program is launched.
1996 Xiling bridge, four-line highway from Yichang, 66
and Yichang airport are into service;
transverse cofferdams building starts.
1997 Closure and diversion of the river; about 66
100,000 people have been resettled.
Financing Construction Cost & Time Completion

Phase Year Construction Stage Water


Level
(m)
Phase-II 1998 Temporary ship-lock is put into operation 66
(1998-
2003) 1999 Excavation of the double-lane ship-lock is 66
finished; about 230,000 people have been
resettled.
2000 About 295,000 people have been resettled. 66
2001 About 325,000 people have been resettled. 66

2002 The diversion channel is closed; left bank 66


concrete pouring completed, about 640,000
people resettled.
2003 The reservoir is filled up to 135 m pool 135
level; first trials with the double- lane ship-
lock; the four first generators are connected
to the grid.
Financing Construction Cost & Time Completion

Phase Year Construction Stage Water


Level
(m)
Phase 2004 The double-lane ship-lock is put into operation, ten 139
-III turbines are already connected to the grid.
(2004- 2005 Left bank powerhouse completed (14 turbines in 139
2009) operation); about 1,000,000 people have been
resettled.
2006 Concrete pouring on the right bank is finished; the 156
reservoir is filled up to 156 m; about 1,200,000
people relocated.
2007 The ship-lift building starts (expected); original plan 156
to fill the reservoir up to 156 m.
2008 The reservoir will be filled up to 175 m pool level 175
(expected); 26 turbines fully operational (expected)
2009 1997 target for completion of the whole project; 175
ship-lift will put into operation (expected).
Financing Construction Cost & Time Completion

Goals: Direct Costs


1) PV calculations and Cost-Benefits • Construction costs of the power station and
transmission facilities
2) Examine uncertainty.
Method: • Operation and maintenance cost

Quantify each effect (e.g. kw Hrs. of electricity). • Lost land from inundation (reservoir)
Indirect Costs
Value each effect (e.g. determine its price)
Sum discounted benefits minus costs • Resettlement costs (including compensation
and development costs)
Benefits:
• Lost archaeological sites
• Power generation & Economic Growth
• Possible accident costs (during construction,
• Flood control & Navigation improvement operation and maintenance)
Uncertainty: Environmental Costs
• Aesthetic loss due to reduction in water flow
• Electricity generated, economic growth per KW
• Sedimentation- lower power generation
Hr.
• Decline in fish catch downstream
• Decay of electricity from sedimentation • Downstream pollution caused by dam
• Loss of archeological sites & Displacements construction
Financing Construction Cost & Time Completion

Expected Results

Discounts values back to current using 5% discount


rate
Financing Construction Cost & Time Completion

Uncertainty Results Results: The final NPV


values are –114, 424, and
The 5th percentile, mean, and the 95th percentile of the cumulative NPV 1321 billion Yuan for the 5th
with a 5% discount rate percentile, mean and 95th
percentile runs.
95th
Percentile The cumulative NPV is
run initially negative due to the
large upfront construction
Mean run and resettlement costs. As
electricity starts to flow, NPV
5th improves. Electricity at end of
Percentile project matters less than in
run early stages.

If climate change reduces


electricity at end, it would
have only a small effect on
NPV.
Financing Construction Cost & Time Completion
Financing Construction Cost & Time Completion
Benefits/Advantages/Positive Effects
1. Control flooding downstream of the dam.
2. Provides water to urban areas and for agriculture-irrigation. The reservoir can store up to 5 trillion gallons of water.
3. The HEP generated will provide 15% of China’s electricity demand.
4. This will decrease China’s dependency on coal and therefore reduce greenhouse gas emission.
5. Thousands of construction jobs were created during the building of the dam.
6. China will be able to bring 10,000 ton ocean going vessels all the way inland, 2000km up to the city of Chongqing.
7. The dam will become a tourist attraction and will attract a lot of people to the area. Many tertiary sector/service
jobs will be created.
8. The electricity generated will help the economic development of cities such as Chongqing, population=3 million.

Costs/Disadvantages/Negative Effects
1. Several large towns upstream, such as Fuling (population=80,000) and Wanxian (population=140,000) will be flooded.
2. Ancient temples, burial grounds and other historic sites will be lost beneath the reservoir too.
3. Over 1.3 million people will have to be relocated.
4. Much of the land used for resettlement is over 800m above sea level, where the climate is colder and the soil can
barely support farming.
5. The pressure created by the huge weight of the water in the reservoir behind the dam could trigger earthquakes.
(But it is engineered to withstand an earthquake of 7.0 on the Richter scale.)
6. The untreated human and industrial waste will not be washed away downstream, but will stay and pollute the river
instead.
7. Areas downstream will be deprived of fertile sediment.
8. It will divert money from other developments. It is currently one of the most expensive projects in the world, costing
more than $26 billion, over their budget.
Financing Construction Cost & Time Completion

25 July, 2012 on dailymail.co.uk

“The giant and controversial Three Gorges Dam in


China has launched the last of its generators, just as it
hits its annual flood peak.
The final 32 generators went into operation this
week, making it the world's largest hydropower project,
built on the Yangtze River in the Hubei Province.
It is designed to decrease the risk of flooding during the
current peak rainfall season, as well as store and
distribute water during the dry periods.
A series of incredible photos show the sheer force of the
flood water released from seven spillways after heavy
downpours in the upper reaches of the dam caused the
highest flood peak of the year.
Water from the Yangtze River upper gushed at up
70,000 cubic meters per second into the dam's
reservoir yesterday.”
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