US$28.5m fraud in railway project
By Dong Zhen |
March 24, 2011, Thursday
|
Print Edition
Print Edition
Almost 200 million yuan was embezzled from the construction fund of the Shanghai-Beijing High-Speed Railway project last year, auditors have revealed.
And their investigations found other issues which either cost the government money or put safety at risk.
At least 187 million yuan (US$28.5 million) was misappropriated in 2010 by individuals and work units at construction companies during the building of the express rail link, the National Audit Office said in a report.
From May to July last year, the National Audit Office closely examined the project's construction costs and discovered misappropriation of funds and other breaches of the rules.
Auditors said the 187 million yuan embezzled from the construction fund represented around 0.14 percent of the 138.4 billion yuan spent on the project so far.
The money was illegally transferred to other accounts or used for other purposes by "some construction work units and individuals," the auditors said. But they did not name the companies or individuals involved or say what legal action had been taken as a result.
A further investigation into the project is due in June. The auditors said they would focus on whether loopholes they had uncovered were fixed and on other sectors vulnerable to embezzlement.
The Shanghai-Beijing rail link is said to be costing 217.63 billion yuan. Construction began in April 2008 after the Beijing-Shanghai High-Speed Railway Co Ltd, affiliated to the Ministry of Railways, was established in late 2007.
Auditors blamed the company for additional losses of around 555.9 million yuan.
After reviewing contracts signed from December 2007 to June last year, auditors discovered 13 suppliers had failed to complete transactions in time. The company was entitled to penalties for breach of contract. But by the time of auditing, penalty money that could not be retrieved because of deadlines added up to 555.9 million, auditors said.
They also found that 16 construction companies involved in the project, all state-owned operations, had fabricated purchase transactions based on fake invoices. Such practices could cause the loss of tax income and provide opportunities for embezzlement and corruption. The fake documents added up to 216 million yuan, auditors said.
They also found some engineering companies supposed to monitor quality and safety had failed to assign the promised number of senior-level engineers.
The Shanghai-Beijing link is due to open this June.
Former Railways Minister Liu Zhijun was sacked last month for suspected corruption and breaches of laws and regulations. He was the main initiator in pushing forward high-speed rail development.
And their investigations found other issues which either cost the government money or put safety at risk.
At least 187 million yuan (US$28.5 million) was misappropriated in 2010 by individuals and work units at construction companies during the building of the express rail link, the National Audit Office said in a report.
From May to July last year, the National Audit Office closely examined the project's construction costs and discovered misappropriation of funds and other breaches of the rules.
Auditors said the 187 million yuan embezzled from the construction fund represented around 0.14 percent of the 138.4 billion yuan spent on the project so far.
The money was illegally transferred to other accounts or used for other purposes by "some construction work units and individuals," the auditors said. But they did not name the companies or individuals involved or say what legal action had been taken as a result.
A further investigation into the project is due in June. The auditors said they would focus on whether loopholes they had uncovered were fixed and on other sectors vulnerable to embezzlement.
The Shanghai-Beijing rail link is said to be costing 217.63 billion yuan. Construction began in April 2008 after the Beijing-Shanghai High-Speed Railway Co Ltd, affiliated to the Ministry of Railways, was established in late 2007.
Auditors blamed the company for additional losses of around 555.9 million yuan.
After reviewing contracts signed from December 2007 to June last year, auditors discovered 13 suppliers had failed to complete transactions in time. The company was entitled to penalties for breach of contract. But by the time of auditing, penalty money that could not be retrieved because of deadlines added up to 555.9 million, auditors said.
They also found that 16 construction companies involved in the project, all state-owned operations, had fabricated purchase transactions based on fake invoices. Such practices could cause the loss of tax income and provide opportunities for embezzlement and corruption. The fake documents added up to 216 million yuan, auditors said.
They also found some engineering companies supposed to monitor quality and safety had failed to assign the promised number of senior-level engineers.
The Shanghai-Beijing link is due to open this June.
Former Railways Minister Liu Zhijun was sacked last month for suspected corruption and breaches of laws and regulations. He was the main initiator in pushing forward high-speed rail development.
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