China Three Gorges Project Corp (CTGPC) responsible for building the mammoth Three Gorges Dam signed a contract on March 27 to purchase the 12 hydropower generating units and accessories for the dam's right bank section.

Unlike the 14 generators installed on the left bank of the dam, which were all produced by foreign companies, eight of the 12, worth a combined 4.54 billion yuan (US$546 million), went to two leading Chinese machinery manufacturers.

The Harbin Electric Machinery Co Ltd (HEC) and Dongfang Electric Machinery Co Ltd, each won four, according to the buyer -- China Three Gorges Project Corp (CTGPC).

"This is the first time for domestic enterprises to independently design and produce 700,000 kilowatt generators, which marks a milestone in the history of China's electric machinery production," said Li Yongan, president of CTGPC.

The French company Alstom Power Hydro won the other four contracts in an international bid, which was also participated by the two Chinese companies and VoithSiemens Hydro Power Generation Co.

The first four of the right-bank generators are expected to be operational in 2007. The Three Gorges Project, the world's largest hydropower plant, started to spin electricity last year. Six of the generators on the left bank are now in operation, while the rest are scheduled to start running within the next two years.

Through an international tender in 1997, the CTGPC bought the 14 generators for the left bank, worth a combined value of US$740 million, from global giants like ABB and Alstom.

The two Chinese firms were subcontractors, winning 31 per cent of the deal.

As part of the purchase order, the foreign firms agreed to transfer related technologies to China for a total of US$18 million.

The transfer has significantly contributed to the technological advancements of the domestic hydropower manufacturing industry, which enabled the CTGPC to reduce its procurement costs.

"We have completely grasped the technologies, and are now capable of independently designing and producing 700,000 kilowatt generators," Wu Weizhang, president of HEC, said.

"The significance (of the contracts) to us is not how big a share it is in our business. It symbolizes a landmark improvement in our international competitiveness that we now have the ability to produce the largest hydropower generator in the world," he added.

Alstom stands as the biggest supplier of generators for the Three Gorges Dam, having won eight contracts for the left bank.

"Alstom's model was the best in the experiment, and it had a competitive price, that's why we chose it," CTGPC's Li said about the international tender for the four right-bank generators.

The Three Gorges Project's power output totalled 8.6 billion kilowatt hours last year, which helped alleviate a power shortage in eastern and central China last year.

The CTGPC said it aims to generate 50 billion kilowatt hours this year, exceeding the 46.28 billion kilowatt hours target set by the government.

Upon its completion in 2009, the project, which also plays a critical role in flood control, will be able to generate 84.7 billion kilowatt hours annually.