Auditors find billions missing in airport construction review

09:37, February 15, 2011      

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CHINA'S top auditor found irregularities involving billions of yuan in a review of airport construction in the past five years.

The National Audit Office examined the books relating to 31 airport projects in 10 provinces or municipalities between May and July last year.

The second-tier cities have been playing catch-up with major cities such as Shanghai and Beijing in building airports, highways and other infrastructure.

In the five years ending 2010, 53 airport projects were undertaken in those areas, including setting up new airports and expanding others. The total investment in the projects amounted to 68.2 billion yuan (US$10.3 billion).

Five airports in Fujian Province and Inner Mongolia Autonomous Region were found to have been involved in swindling 61 million yuan by repeating project applications, the auditor said yesterday.

Suppliers of materials for airports in Chengdu, Daqing, Yulin, and Urumqi cities were found to have used fake invoices when settling with construction companies to avoid tax, which involved a sum of 33 million yuan.

A sub-contractor at Chengdu Airport was found to have avoided tax by sending receipts rather than formal invoices to the firm building the airport, involving another 65 million yuan.

Authorities in Daqing have already fined related companies and clawed back the tax revenue.

Other cases are still under investigation, according to the auditor.

Irregularities were also found in contracting as one-fifth of contracts checked in the auditing campaign were found to have breached contracting rules and regulations, involving 1.9 billion yuan.

Environmental protection was another problem in the construction of airports in such areas, the auditing body said.

In China, infrastructure construction is required to include environmental evaluation before construction and final environmental inspection after the project is finished.

The move is aimed at minimizing environmental problems during the country's economic expansion.

However, the issue was often neglected due to its higher costs for little economic benefit, the auditor said.

Five airports began construction ahead of the environmental impact evaluation, while another 15 airports started operations before the environmental inspection results were known.

Another seven airports didn't comply to their original waste water treatment plans - some even drained waste water direct into rivers without any treatment, the auditing body said.

The Civil Aviation Administration is currently in talks with the Ministry of Environmental Protection to set up a mechanism to strengthen supervision of environmental protection in the industry.

Source:Shanghai Daily
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