The contract, worth 296 million yuan (US$35.6 million), requires the firm to dig tunnels totaling 21.8 kilometers in length, China's biggest city water supply project to date.

Experts say CMC, an engineering multinational of more than a century old, won the job thanks to its efficient tunnel boring machines and additional sophisticated engineering technology.

The water supply program is intended to divert water from a reservoir under construction to Kunming, the capital of Yunnan.

The project will help Yunnan double the existing water supply capacity for Kunming by 2005.

The diversion program, including a related tap water plant and the expenditure for resettling residents to make way for the reservoir, is expected to cost nearly 4 billion yuan, Xinhua news agency reported.

The whole water diversion line totals 97.5 kilometers in length, and cuts through a number of hills.

The firm is the only foreign contractor for the water diversion project.

(eastday.com April 20, 2002)