Eco-watchdog delays 32 projects

PUBLISHED : Wednesday, 29 July, 2009, 12:00am
UPDATED : Wednesday, 29 July, 2009, 12:00am

The mainland's environmental protection watchdog withheld approval on 32 industrial projects involving 134.8 billion yuan (HK$152.93 billion) of investment in the first half on the grounds that they would cause pollution or add to industry overcapacity.

They include projects by two of the country's largest power producers, China Huaneng Group and China Huadian Group, the Ministry of Environmental Protection said.

The power companies face a blanket ban on construction of new projects until they rectify the contravention of environmental laws. The number of banned projects is substantial compared with the 229 that were approved by the ministry, an indication the watchdog is flexing its muscles after being upgraded last year to a ministry from a bureau.

The stiff punishment handed to the power firms shows Beijing is serious about changing the mainland's poor environmental protection record and sorting out irregularities.

It is common for mainland industrial projects to start construction before environmental impact assessments are approved by the watchdog, as companies rush projects through to meet demand and earn more profit.

The power industry is notorious for such contraventions, which partly explains why the average construction period for coal-fired power plants on the mainland managed to be reduced from three years to two between 2002 and 2006 when there was a severe shortage of power.

China Huaneng, the parent of listed Huaneng Power International, and China Huadian, the parent of listed Huadian Power International, were ordered in mid-June by the ministry to stop construction at their hydro dams at the Jinsha River in southwest China, part of the upper reaches of the Yangtze River.

They were accused of having begun work without ministry approval.

Wan Bentai, the ministry's chief engineer, said their projects would be back on track once the environmental assessments and comprehensive surveys of the river's hydropower potential were completed.

China Huadian vice-president Chen Feihu said yesterday: 'We are in the process of perfecting the environmental protection procedures on the troubled hydro project, but I cannot tell the time frame on the rectification.'

China Huaneng's spokesman could not be reached.