TIANJIN - AFTER 17 months of painstaking preparation and planning, Singapore and China yesterday began construction of their flagship eco-city, with a ground-breaking ceremony attended by top leaders from both countries.

Singapore's Senior Minister Goh Chok Tong and Chinese Premier Wen Jiabao were at the event to launch the project, which both sides hope will show the way forward for other environmentally-friendly cities in China.

The two leaders, who first endorsed the bilateral venture last April in Beijing, were all smiles when they met for brief talks at the eco-city's administrative building before the ceremony.

'I remember that it was little more than a year ago when the idea was just brewing. From then to its implementation, the progress has been very fast,' said Mr Wen. The Chinese Premier, who signed a formal agreement setting the project in motion with Prime Minister Lee Hsien Loong last November in Singapore, yesterday called the project a new highlight in bilateral ties.

The development of the city will be overseen by the Sino-Singapore Tianjin Eco-City Investment and Development Company, a 50-50 joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Company and a Singapore group led by the Keppel Group.

In his address, Singapore's National Development Minister Mah Bow Tan said the project was 'timely and significant' coming at a time when 'the world faces serious challenges in balancing protection of the natural environment with the pursuit of economic growth'.

SM Goh and Mr Wen, along with senior officials including Tianjin party secretary Zhang Gaoli, the city's Mayor Huang Xingguo and Minister of Housing and Urban-Rural Construction Jiang Weixin - 'broke ground' with shovels as confetti rained on a specially constructed stage.

Work will now begin on the first 4 sq km plot, an area roughly the size of Jurong East Town in Singapore. The start-up area will be developed in three stages over the next three to five years.

And within 15 years, at a cost of around 50 billion yuan (S$10 billion), the eco-city will spread across a 30 sq km site. About 350,000 people will eventually live in the township, which is intended to show how eco-friendly living can be balanced with vibrant economic activity.

Speaking to reporters yesterday at the end of his five-day visit to China, SM Goh said the global financial crisis would not affect the construction of the project.

He disclosed, however, that he had asked Premier Wen to consider lifting restrictions on offshore loans for the project. This would make it easier to bring in, for example, potential partners from the Middle East, who 'may want to have their own funding from outside'.

Mr Goh said Mr Wen's presence at the ceremony showed the importance of the project to Beijing's top leaders at a time when the world is looking at the impact of China's growth on the environment.

'If China is being criticised for not taking into consideration the environment, China can point to one eco-city which it is embarking on, and later on to many other such cities,' added Mr Goh. Singapore, in turn, gains from stronger political ties.

And Mr Goh said there should be no fear of competition from other eco-city projects being built elsewhere in China, although he said the aim should still be to make this one the best. 'In the end are we special, and the most outstanding? I think let's try to do that,' he said.

Mr Goh left China for home yesterday.