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Beijing — China’s largest dam may be at the verge the collapse after authorities in the southern city of Shanghai built it on an island with a coastline of more than 3,000 square kilometers, a Reuters report said Wednesday.

In a bid to boost demand for water and alleviate water shortages in the region, the authorities in March built the dam on a site known as the “Tsinghua island” at an elevation of more that 3,400 meters (13,300 feet) on the southern tip of Shanghai, the report said.

The government hopes the dam will help reduce the demand for the city’s water supply, and the project is expected to generate as much as $1 billion annually, it added.

The project was approved in March by China’s State Council, which oversees state-owned enterprises.

The project, which is expected cost $1.5 billion, is part of the city-state’s efforts to increase water use and address the growing water shortage in Shanghai, which has more than 60 percent of its population under water.

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