(ADDS detail on scheme, quotes)

by Lorien Holland

BEIJING, March 5 (AFP) - China expressed glowing confidence Wednesday in its ambitious Three Gorges Dam project and announced a five-day sell-out of its first bond issue to prove the point.

"We are fully confident that with modern science and technology, the Three Gorges Dam will be totally successful," said Lu Youmei, managing director of Three Gorges Project Development Corp.

"The advantages of building this dam far outweigh the disadvantages and as an engineer I am fully confident that the river closure will go ahead as scheduled in November," he told a media briefing on the sidelines of the National People's Congress in Beijing.

China approved plans to dam the mighty Yangtze River and create the world's biggest hydro-electric power project in 1992, despite stiff oposition from environmental and human rights groups which claimed it would be a social and ecological disaster.

Of the approximately 1.2 million people who will have to move to make way for the reservoir, some 60,000 have already been displaced to newly-built accomodations at a cost of 5.975 billion yuan (719.8 million dollars), said Qi Lin, head of resettlement for the project.

He added a total of 67 townships and cities were under construction, but that authorities in the two provinces affected Sichuan and Hubei were also encouraging people to move to under-populated regions, which are generally impoverished areas such as Xinjiang, Tibet and Gansu.

In spite of this forced migration and the ecological changes that will inevitably arise with the flooding of the 632 square kilometre (253 square mile) basin in central China, Lu demonstrated domestic confidence in the project by announcing its first bond issue had sold out in five days.

"I have just received information that in the past five days, all of the Three Gorges Project bonds issued on February 28 have been sold," he said.

The issue value was one billion yuan (120 million dollars), with a three-year term and an annual interest rate of 11 percent.

Meanwhile, Guo Shuyan, the high-ranking government official given ultimate control of the 203.4 billion yuan (24.5 billion dollar) project, extolled its virtues, from reducing coal use to preventing seasonal flooding that affects 30 million people downstream.

He also brushed aside fears that heavy silting would render the massive dam inoperable and dangerous by saying Chinese studies had shown silting would stabilize at around 14 percent of the reservoir volume within 80 years.

The entire project, work on which is slightly ahead of schedule, should be finally completed by 2009, with the first of its generators coming on line in 2003 and all debts repaid by 2012.

Its total installed electricity generation capacity will be 18,200 megawatts, although bidding is still underway for the contract to supply 14 turbines and then jointly construct the remaining 12 required.