China uncovers more accounting problems with Three Gorges Dam

Reuters News
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Posted: Sep 10, 2015 6:12 AM

BEIJING (Reuters) - Chinese government auditors have found more accounting problems with projects linked to the $59-billion Three Gorges dam, the world's biggest hydropower scheme, following a critical report last year that revealed nepotism and other corrupt practices.

The state audit office has conducted 21 inspections since construction began in 1992, uncovering issues such as embezzlement, but continues to find problems, it said in a statement on its website on Thursday.

The National Audit Office found accounting problems amounting to almost 2 billion yuan in the final accounts for a 7.1-billion-yuan ($1.11 billion) underground hydroelectric plant, it said.

These included 1.54 billion yuan from improper bidding and 337 million yuan in duplicate calculations, it said, adding that too much money had been spent on some equipment, while management oversight was lax.

The Three Gorges Corporation, which runs the dam, is now "proactively organizing rectifications" having received the report, the auditor said, adding that it would watch developments.

"China Three Gorges Corporation attaches a great degree of importance to the problems pointed out by the audit," the company said in a statement on its website.

"At present all the problems pointed out by the audit have already been finished or rectified."

The dam has long been controversial.

Between 1992 and 2009, all citizens had to pay a levy built into power prices across China to channel money towards its construction, a project overshadowed by compulsory relocations of residents and environmental concerns.

Last year the ruling Communist Party's anti-graft watchdog slammed the Three Gorges Corporation for shady property deals and dodgy bidding procedures.

In 2011, then-premier Wen Jiabao presided over a government meeting that said that despite the benefits from the dam, it had spawned a myriad of urgent problems, from the relocation of more than a million residents to risks of geological disasters.

In 2000, six years before the project was completed, authorities busted a ring of officials who had siphoned off hundreds of millions of yuan in resettlement funds.

($1=6.3770 Chinese yuan)

(Reporting by Adam Rose and Ben Blanchard; Editing by Clarence Fernandez)