The Shilongba Power Plant, located in the western suburbs of Kunming, in southwest China's Yunnan Province, was built in 1908 using German technology and equipment, said Deputy Director Tian Jinghua.

It draws freshwater from Dianchi Lake to generate power, Tian said.

But it has had to suspend operation several times in recent years because of water pollution, he said.

Chemical plants on the upper reaches of the Tanglangchuan River have been discharging acidic effluent into the lake, according to the power plant.

In November 2003, acidic water "attacked" the power plant, resulting in direct economic losses of up to 19 million yuan (US$2.4 million), Tian said.

The latest incident occurred on October 15 and 16 this year. Highly acidic water forced the plant to stop generating power for 15 hours, he said.

A probe by local environment authorities found that two of the three chemical plants on the upper reaches of the Tanglangchuan River were covertly discharging highly toxic waste water.

Two plants were ordered to suspend operations and improve their production processes, and were fined 50,000 yuan and 60,000 yuan, said Li Li, director of the Pollution Control Department of the Kunming Environmental Bureau.

The three polluters each agreed to pay 20,000 yuan to the power plant to partially compensate its economic losses.

"But imposing paltry fines is not likely to deter chemical plants," said Li.

She pointed out that a Kunming chemical plant would have to spend 760,000 yuan over a six-month period to dispose of waste water correctly but can only be fined 100,000 yuan if it violates waste water discharge regulations.