The first phase, the construction of homes for 10,000 people, has now been put back for a second time. Originally work was to begin in 2006. Work is now unlikely to start before the end of this year and possibly not until 2009.
Michael Kwok, director and general manager of designers Arup, a London based consulting firm, confirmed the latest delay and blamed problems with the new political regime in Shanghai. The jailing of former Shanghai communist party chief Chen Liangyu, a key supporter of the development, has affected the planning process.
'We hope to be able to start on site this year, but because of this delay, the first phase probably won't finish until 2012,' said Kwok. The only signs so far are ten wind turbines standing at the boundaries of the city.
The news raises concerns about the project and whether it is viable. Described as the world's first carbon-neutral city for up to 400,000 people, a model of ecological harmony powered entirely by renewable energy, it has a lot of critics.
Some call it a white elephant, a posh community for wealthy commuters to flee the smog and traffic of Shanghai.
'Zero-emission city is pure commercial hype,' said Dai Xingyi, a professor at the department of environmental science and engineering at Shanghai's Fudan University. 'True zero-emissions comes with a big price tag. I doubt anyone would be willing to pay for it,' he added.
The idea is that it will run on energy from wind, solar power and biogas extracted from municipal waste. But critics say generating electricity from wind would be at least twice more expensive than using coal. Electricity from solar power could be ten times more expensive.
But Arup defends its project. 'The idea is that China is moving from an industrial age to an ecological age,' said Roger Wood, an associate director of Arup. Arup has declined to disclose the cost of the eco-city project, but an official at its partner, state-owned Shanghai Industrial Investment Corporation, said the construction costs could be at least 30 or 40% more than for a typical property development of the same size. Those costs would be offset in the long term as it becomes self sufficient in energy terms, Arup claims.