The ambitious project, now in an advanced stage, will involve laying a pipeline undersea for about 600 miles. Experts cited in media reports on the government plan said that taking fresh water from southern resources to the north would be more economically feasible than investing in the desalination of seawater.

The AcquaAtacama pipeline entails a contract with French construction giant Vinci S.A. and Chile's non-profit Fundacion Chile, MercoPress and Portal Minero said.

The Santiago Times reported the plan without further elaboration from the administration of President Sebastian Pinera.

The water pipeline project was earlier viewed with skepticism because of Chile's susceptibility to earthquakes. An 8.8 temblor and aftershocks in February killed about 490 people and devastated large tracts of urbanized Chile and key infrastructural networks. Funds for reconstruction had to be redirected by the newly elected Pinera from scheduled poverty reduction and urban develop programs.

The earthquake epicenter was off the coast of the Maule region, about 71 miles northeast of Chile's second largest city, Concepcion. Analysts said earthquake risks to any man-made structures, including pipelines, would remain a reality for Chile.

The pipeline is likely to be built in three phases and is to be completed in five years, Fundacion Chile's Director for Environment and Energy Marcela Angulo said.

Other commentators said the project made economic sense. "Never in the history of the world and of Chile has water been so scarce, so transporting it is a good business," former Public Works Minister Eduardo Bitran said. "Water is the gold of the future."

Officials said the pipeline will be anchored to the ocean floor at a variable distance from Chile's Pacific coast and will be built using a proprietary technology -- submariver -- that provides greater resistance to rocks and to internal and external pressure changes.

Vinci and Fundacion Chile see major industrial consumers of water as key customers for the project. The companies hope to persuade the present major consumers to switch to fresh water to save on energy deployed to desalinate water.

Desalination in Chile costs $1 per cubic meter of water, compared with 49 cents per cubic meter of freshwater to be transported by the pipeline.

Supporters of the project, including former water management agency expert Pedro Rivera Izan, said the AcquaAtacama project would potentially save the northern region from environmental damage, caused when water was extracted from areas that aren't water rich.

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