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Fraud found in major projects, reports

By Xin Dingding (China Daily)

08:33, March 31, 2012

In two separate reports, the National Audit Office announced it found evidence of improper activity in one of the country's major natural gas pipeline projects as well as earthquake reconstruction efforts in Yushu, a prefecture in Qinghai province.

A report released by the office on Friday showed that the 8,645-km project purchased material and equipment worth a total of 837 million yuan ($133 million) through substandard bidding.

Fraud has also been detected in the sourcing of the pipeline's components. Poor-quality flanges, a compressor part, were found in 31 compressors installed along the pipeline, according to the report. Of a total of 242 flanges, sourcing agents supplied 147 of them ordered from two unlicensed domestic factories, it said.

Auditors also uncovered unqualified construction workers and supervisors employed in the 142.2-billion-yuan pipeline project.

For example, contractors for the Shanghai portion of the pipeline promised to dedicate 69 professionals to the project.

But auditors found that 48 of the listed professionals were replaced with unqualified personnel.

Also in the Shanghai portion, earthwork worth 6.5 million yuan was subcontracted to an unlicensed construction team.

Another company working on the Guangzhou-Shenzhen leg was found to have breached its contracts and subcontracted welding work worth 4.96 million yuan to a Henan-based company. The report said that corrections were made after the problems were revealed.

"Three cases have been handed to judicial departments for further investigation," the audit report said.

In a separate report, auditors said unqualified construction teams were also found in the reconstruction of Yushu, a prefecture in Qinghai province.

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