By 2005, the gap between water demand and supply would reach 794 million cubic meters and exceed a billion cubic meters in 2008, the vice minister of environment Pan Yue was quoted as saying in the latest issue of the Beijing Review.

The situation could become a major problem impeding the sound economic development of the capital, the report said.

A population that has grown from eight million to 14 million in the last 20 years has boosted water demand, while a recent drought and growing water wastage and pollution have resulted in a fall in supply, it said.

The capital has been tapping non-renewable underground tables, with water bureaus increasingly drilling deeper to satisfy demand.

Beijing's current underground water level averages 13.65 meters below the earth's surface, two meters below the 2002 level and 7.2 meters under the 1980 levels, it said.

Despite billions of dollars in efforts to build treatment plants and implement conservation efforts, water management practices continue to remain lax or non existent, the report said.

Money is also being poured into water diversion projects, with some 50 million cubic meters piped in from neighboring Shanxi province last December.

The much touted multi-billion dollar "South-to-North Water Diversion Project" is further expected to address the growing shortages, but will see the price of water rise from the current 3.5 yuan (0.42 dollars) per cubic meter to six yuan per cubic meter in coming years, it said.

TERRA.WIRE