A project that will cost nearly 14 billion yuan ($ 2.14 billion) to relocate people from remote mountainous areas in Northwest China has started, a provincial government said.

Baiyu suffers severe drought these years.

The relocation project, prompted by health concerns, is targeting residents living in northern Shaanxi's poverty-stricken Baiyu mountainous areas.

The project will take 10 years to help 392,000 people gain access to a safe water supply, a press officer at Shaanxi provincial office of poverty alleviation and development, said on Monday.

"Some residents will be moved out to nearby villages where there are abundant water sources," the official, who declined to be named, said. "Some will settle down in cities or relatively developed towns with better educational and living systems."

Baiyu mountainous areas, located near the border of Shaanxi and Gansu provinces and the Ningxia Hui Autonomous Region, do not provide sufficient supplies of drinking water due to the high altitude, deep ground water and scant rainfall.

People in those areas have long endured surface water with large amounts of fluorine or a salty, bitter taste.

The provincial government once dug wells, set up reservoirs, constructed water cellars and launched a series of projects starting in the 1980s to solve local drinking problems. However, these projects could not help all the people living in those areas, the official said.