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Official: No Major Embezzlement of Funds Involving Three Gorges Dam
No big embezzlement on construction funds for China's mammoth Three Gorges Dam project has been discovered so far, said Lu Youmei, president of the China Three Gorges Project Corp.
The announcement was made at a time when a string of grafters have been sentenced to death, imprisoned or punished for stealing funds for resettling residents of the reservoir area.
Lu said that since the project, designed to control floods on the Yangtze River and increase power generation, was launched in 1993, construction funds and resettlement funds have been separateed.
Although the corporation is responsible for allocation of the funds to departments in charge of resettlement, it manages only the construction funds.
The declaration clearing dam constructors of graft was supported with proof from auditing reports of the National Audit Office, which established a specialized sub-office to annually check the corporation's financial report.
Li Yong'an, vice-president of the corporation, attributed the appropriate use of construction funds to a tight management system and strong supervision.
Besides examination by State auditors, finance of the project, the largest dam in the world which is expected to need 203.9 billion yuan (US$24.6 billion) in investment, is also checked by the Ministry of Finance and the State Council Three Gorges Project Construction Committee every year.
"From the very beginning, we attached great importance to finance supervision,'' Li said.
The auditing office was opened at the request of Lu, who, in order to make sure every penny of the funds is properly used, also invited certified public accountants to review its finances.
However, Li admitted that there is some waste in construction. But he did not elaborate.
"Overall, we have never violated State regulations in using the construction funds and no big embezzlement has been found,'' he said.
At the end of July, a total of 55.9 billion yuan (US$6.7 billion) had been allocated for construction of the dam.
Unlike the construction fund which was managed only by the corporation, the resettlement fund was allocated to the Three Gorges Resettlement Bureau which later distributed the money to cities and counties where people will have to move because of the construction. Officials at city, county, town and even village levels can have a hand in using the fund, which led to corruption.
By the end of 1999, 17.7 billion yuan (US$2.1 billion) was allocated for resident resettlement.
Of the money, 500 million yuan (US$60 million) was embezzled, according to a report from the National Audit Office.
Project officials told Business Weekly that expenditures of the project had been controlled within the budget.
Meanwhile, unlike many big projects which, once started, become bottomless pits of capital, total investment of the dam project may fall below its expected figure thanks to low prices and interest rate level in the country in recent years.
Lu said the multi-channel financing programme ensured the construction fund can be collected and allocated timely.
China has been collecting the Three Gorges Project Construction fund nationwide with a surcharge of electricity use. Consumers in economically developed areas pay 0.7 fen (0.08 US cents) per kilowatt of electricity and consumers in underdeveloped areas pay 0.3 fen (0.04 US cents).
Revenue from electricity generation by the Gezhouba Power Plant, a subsidiary of the dam project, will also be used to fund the project.
The China Development Bank will also grant a total of 30 billion yuan (US$3.6 billion) in loans for the dam between 1994 and 2003.
Starting in 2003, the first batch of the dam's generators will begin generating electricity and revenue, which will be used for further construction.
By 2009 when the whole project is completed, a total of 300 billion kilowatts are expected to be produced per year.
The project has also utilized US$1.4 billion in foreign funds. The money came from 24 commercial banks in seven countries.
The company has also issued a total of 6 billion yuan (US$722 million) in corporate bonds.
Lu disclosed that the corporation is also considering becoming a joint-stock company when the time is ripe. He did not elaborate. (Chinadaily)
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