BEIJING, March 22 (Xinhua)-- Local governments in drought-ravaged Chinese provinces will have to supply a large proportion of the investment needed for major water diversion projects from areas rich in water resources, according to an official with the Ministry of Water Resources (MWR)

The central government used to fund such projects entirely but, speaking at a workshop to mark the 15th World Water Day, Gao Erkun said, "There will be no free lunch for water-thirsty provinces diverting water from water-rich areas.

"A market-based mechanism, something that has proved successful in the West, will prove to be effective in the rational allocation of the resources," he said.

Hu Siyi, vice minister of water resources, expects the per capita water resources to slump from 2,200 cubic meters to less than 1,800 cubic meters by 2030 as the population balloons.

"The ministry will set up consumption quotas and make local officials responsible for managing the use of water. The average water consumption will be reduced by 20 percent by the end of 2010in an effort to avert a looming shortage crisis," the WRM minister Wang Shucheng said last month.

"China faces a severe challenge in its water resources management. It has had enormous successes, but we clearly recognize that filthy and contaminated water as well as unbalanced resources allocation still haunt the nation," Hu said.