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Now, massive scams rock China

Last Updated: Tuesday, February 15, 2011 - 14:35

Beijing: Chinese auditors have found millions of dollars of irregularities in airport construction projects across the nation, days after reports of a high profile railways scam.
Ten airport projects across the country cost taxpayers 159 million yuan (USD 24 million) in false accounting and tax avoidance, the National Audit Office (NAO) said.
China`s airport building boom during the past five has boosted local economies, but it has also led a series of graft and environmental problems, the NAO said.
A total of 23 airports projects, which cost 1.94 billion yuan, were not open to public tendering even though they were supposed to be, it said, implying that the contracts were open to abuse.

"Relevant government departments are investigating further in accordance with the law and will...find out who is responsible and hold them accountable," auditors said in a statement reported Tuesday by state-run China Daily.

The NAO said 32.4 billion yuan (USD four billion) had been spent in 10 provincial-level regions on building or revamping 53 airports by the end of 2009. The audit focused on 31 key airports that benefited from 94.4 percent of the investment.

The airports scam came just days after the sacking of China`s long standing Railway Minister Liu Zhijun from a key post of the ruling Communist Party, pending investigations into the corruption charges.

In his nine year tenure as Railway Minister, Liu overseen Chinese railways emergence as global giant with rail-links connecting length and breadth of the country, costing billions of dollars.

He is being probed for links with a business woman, who supplied machinery for the fast developing speed trains. Speculation is rife that a lot of railway contracts approved by Liu may be cancelled.

The airport building boom came as part of China`s efforts to stimulate domestic demand -- primarily through encouraging infrastructure building with the investment of four trillion yuan (over USD 10 billion) during the global financial downturn in 2009.

The audit result was based on the reading of 359 project contracts, or 20 percent of the total number of contracts signed with the 31 airports, the NAO statement said.


First Published: Tuesday, February 15, 2011 - 14:35

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