Audit sees US$1.1b in irregularities
Print Edition
AROUND 6.7 billion yuan (US$1.1 billion) of irregularities were discovered in China’s cross-country electricity transmission program that started construction 20 years ago, the National Audit Office said yesterday.
Of the amount, 3.44 billion yuan were involved in irregular bidding procedures, making up 16 percent of the total amount the NAO found after inspecting 21 projects that were finished in the past 10 years.
Grid companies did this by directly assigning construction projects to their affiliates without bidding. Some manipulated the bidding results by tendering standards and shortening the time for bidding, the NAO said in a statement.
It also found that suspicious bidding in equipment, material procurement and activities involving bidding agencies resulted in about 819 million yuan of illegal gains.
Six grid companies involved in the transmission program have embezzled a combined 1.38 billion yuan from construction funds used to pay incentives and cover unspecified spending, the NAO said.
The companies swindled the funds mainly through creating fraudulent contracts or receipts, according to the NAO.
Some grid companies overestimated project investment which resulted in up to 1.04 billion yuan in unnecessary expenses.
The west-to-east program, initiated in 1993, transmits electricity from China’s western hinterland to power-hungry eastern regions. By June 2013, 43 of 48 approved projects were completed and operational, with 179 billion yuan invested.
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