Chongqing faces a major problem finding new homes for villagers displaced by the Three Gorges Dam project, with a further 100,000 set to be relocated this year. The southwest municipality, which lies upstream from the dam, is home to about 85 per cent of the more than one million people authorities must relocate before the controversial project is completed in 2009. Other Three Gorges migrants come from Hubei province, where the dam is located on the Yangtze River. Liu Fuyin, who heads Chongqing's migration bureau, was quoted by Xinhua as saying the city had moved into the third phase of relocation work as builders prepare to flood the dam's reservoir this year. 'Although Chongqing city has already completed the second phase of migration and relocation tasks, the third and fourth phases are still rather arduous,' he said. The city must move 470,000 people and 556 companies before the project is completed. City residents say many of the remaining people in areas due to be submerged are holding out for higher compensation. Some migrants complain they have received little or no compensation, while environmentalists worry that slow progress on the clean-up of old industrial sites will pollute the reservoir. Chongqing must move at least 95,600 people a year between now and 2009, Mr Liu said. The city has already resettled 260,000 people from rural areas that will be affected by the project. He said Chonqging had also found new homes for nearly 300,000 people in cities and counties that will be flooded when the water level in the reservoir rises to the 135-metre mark in June. The municipality had invested 29.3 billion yuan (HK$27.4 billion) in resettlement so far. China started construction of the US$27 billion (HK$210.6 billion) dam and hydropower project in 1993. The government hopes the project will generate power to support economic growth in the hinterland and control floods on the Yangtze River.