Beijing buyers being burned by coal fraud

PUBLISHED : Tuesday, 12 December, 1995, 12:00am
UPDATED : Tuesday, 12 December, 1995, 12:00am

MILITARY police in Beijing have been aiding and abetting crooks who are selling low quality coal and swindling 40 per cent of buyers, according to an investigation by the Workers' Daily.

Most of Beijing is heated by coal shipped by rail from Datong, but military police have been providing escorts to a mafia which transports the coal by truck from Shanxi province.

'Some speculators hire military police vehicles to accompany them so they can avoid paying road and bridge tolls, and checkpoints,' the Workers' Daily said.

'Some pay 10,000 yuan [HK$9,300] to buy a military police plate for each of their trucks, others simply make fake ones.' The Datong coal mines are 380 kilometres from the capital and distribution is supposed to be the monopoly of the Beijing Coal Corporation.

Yet, since 1991, the corporation has seen its annual sales drop from nearly 10 million tonnes to just over six million. At the same time its operating profit has dwindled to next to nothing.

In theory, it is much more expensive to ship the coal by truck and so the coal mafia operates a complicated racket to undercut the corporation's prices.

Since trucks are only allowed to enter the city after 8 pm, the black market makes full use of the darkness.

'They hide empty gas barrels, tyres and even big prefabricated cement blocks among the coal,' the paper said. Others mixed it with coal from local mines which was cheaper but of lower quality.

Along the road from Datong, the truck drivers stop at rest houses where they are treated to free board and lodging. While they are resting, the Datong coal is mixed or sometimes replaced with inferior coal.

The owners make a profit by selling off the Datong coal while the truck drivers fob off their new loads on unwary buyers.

The purchasers sometimes cannot see what they are buying. Some do know but accept bribes of up to 28 yuan per tonne for turning a blind eye.

When dealing with customers who use weighbridges, the fraudsters resort to 'making a chicken's nest' by adding blocks of solid coal, which weigh more but are less valuable, to the load.

Some customers have ended up having to buy twice as much winter coal as they did in the past.

The Workers' Daily said the operators had thwarted police efforts to crackdown on the illegal market because they received tip-offs before every raid.