Unusually frank report condemns dam project's poor management

PUBLISHED : Tuesday, 21 July, 2009, 12:00am
UPDATED : Tuesday, 21 July, 2009, 12:00am

China's second-largest hydropower dam project, on the upper reaches of the Yangtze River, has been plagued by resettlement, budgetary and construction quality problems, an audit report has revealed.

The report, released by the National Audit Office yesterday, found that hundreds of millions of dollars had been overspent or misused in the construction of the massive Xiluodu hydroelectric power plant, located on the Jinsha (Yangtze) River on the border between Sichuan and Yunnan .

It was the first overall audit of the world's third-largest hydropower station, which was launched in 2003 despite controversy over its environmental impact and the relocation of more than 61,000 people.

Environmentalists welcomed the report, which made the rare move of listing massive flaws in budgetary and quality control, including the mismanagement of resettlement funds. But they said it dodged questions over who should be held responsible for the problems, and failed to heed geological concerns or provide solutions.

The project's quality suffered because its construction period was cut by 27 months, the report said.

Like nearly all hydropower projects across the mainland, the Xiluodu dam met strong opposition from local residents and environmentalists despite the authorities' positive forecasts of economic gains, including the benefit of easing the country's acute power shortage.

The project was scheduled to start in 2002, but was postponed for 15 months. It came to public attention in 2005, when the mainland's top environmental watchdog halted the project because a mandatory environmental impact assessment had yet to be approved.

Despite several delays, the China Three Gorges Project Corporation, the project's developer, managed to dam the Jinsha River in 2007 - a year ahead of schedule, according to the report.

At least 1.7 billion yuan (HK$1.9 billion) was overspent to make up for several delays by altering original designs and shortening some important preparation work, such as geological surveys.

'The significant reduction of construction time has increased the engineering risks of the project,' said the report, citing the collapse of a drilling tunnel in 2003 due to ignorance of geological risks.

More than 1.4 billion yuan earmarked for resettlement has yet to be disbursed, and more than 50,000 people have yet to be moved to make way for the project.

More than 47 per cent of the project's contracts, worth a total of 1.68 billion yuan, were awarded without public bidding, and subcontractors were found to have made huge profits from overbidding and the misuse of funds.

Fan Xiao, a Sichuan-based geologist, said that although the report had listed many serious flaws in the project, it failed to shed light on how to prevent problems in the future.

'If they don't seriously tackle the problems and punish those responsible, I don't think they can ever root out future problems,' he said.