Friday, January 26, 2007

Three Gorges Dam Relocation Funding Misused

Three Goreges Dam project

Hundreds of millions of yuan was found in question in local dealing of state funding for relocating people and businesses that would be flooded due to the Three Gorges Dam construction, the National Audit Office announced this week, after finishing auditing in ten counties in Hubei Province and Chongqing City.

The audit found that during 2004 and 2005, 270 million yuan (about $34 million) of state fund for the relocation were put to illegitimated uses, such as opening businesses, executive expenses and paying loan interests, which were mostly not related to relocation programs. Chongqing authorities, for example, spent more than 5 million yuan to build office buildings and employee housing.

Meanwhile, some local authorities overstated migrant population and relocation needs and obtained about 17 million yuan more in funding. Caught in such foul play includes a government agency responsible for a port construction, which seized millions of yuan by submitting false project design and exaggerating material costs.

Other problems discovered in the audit include delaying in distribution funding to migrant supporting programs and improper use of funding, such as spending too much in building training facilities but not enough in the actual skills training for the migrants.

The State Council has sent notices to Hubei and Chongqing authorities, requesting correction of the misconducts. By December, more than 240 million yuan ($30 million) has been retrieved or compensated, according to a report of the National Audit Office.

The Three Gorges Dam relocation project started in 1993 and is expected to finish by 2009. By the end of 2005, the state government has invested 51 billion yuang (about $6.5 billon) to fund the relocation, providing housing, resettlement support for migrants and compensation for closed businesses. More than one million people and over 1500 businesses have been relocated.

National audit has become such a hot topic in China in recent years that the director of the national audit office, Mr. Li Jinhua, is treated by Chinese media as a star . The wide publicity of its results, a government practice carried out in recent years, could be seen as a progress of openness of the Chinese government.

For the recent three or four year, the annual release of the audit results has revealed tens of millions of yuan in question among the budget and expense of national government agencies. Although the public doubts the accuracy of the audit, which may not have disclosed the full picture of financial frauds of the government, and how much impact such publicity can have on curbing misconducts, the audit is largely welcomed.
----by Josie Liu

Detailed coverage:

The audit report on the official website of National Audit Office


Anonymous said...

Hey, I didn't know you still keep up writing this much! Good job and my respect!

I am now working in Shanhgai as an energy reporter. hope we can catch up soon. - Yang Jing

Stephen said...

I've just found your site and I like the reporting. Interesting stories, and well written.
In my city, near Baoding, the city government skimmed money off a deal between the university and the local farmers that were to be relocated. The university is expanding its campus, and agreed on payment with the farmers. The money went through the city, and it didn't all make its way to the farmers.

Relocation Sugar Land said...

The Three Gorges Dam, the world's largest hydropower project.The level of the Yangtze River and its tributaries since its flooding in 2003.It is said that 'problematic funding' occurs in the application for resettlement funds; what's the problem? In 2005, China's Central Disciplinary Committee revealed that 0.14% of the Three Gorges Relocation Funds proved problematic – the lowest 'occurrence of problems' in statistical funds then in China. In the 270 cases in question, misused funds have been recovered, and guilty parties have been severely punished. The audit report in 2006 indicated that the 440 million of 40 billion yuan RMB labeled 'problem funds' were later are traced back to application orders rather than embezzlement. So far, 95% of 'problem funds' have been settled in a rational way. (Tan Qiwei, Vice-mayor, Chongqing Municipality)