Financial irregularities of Three Gorges Dam project total 7.9b yuan

The National Audit Office has discovered 7.9 billion yuan (HK$9.9 billion) of irregularities related to the Three Gorges Dam project, including around 279 million yuan in funds intended for relocating residents.

The auditor also said construction mismanagement had led to an extra investment of 808 million yuan, Xinhua reported.

Other irregularities relating to project contracts and financial management involved a total of 6.7 billion yuan, it said, adding that it also found problems concerning compensation for migrants, geological disaster prevention and ecological protection in reservoir areas.

"The infrastructure and public services of the Three Gorges Dam is flawed, and the ability of relocated residents to find jobs is weak," the audit office said.

"Local governments, including Chongqing, should improve their supervision of the relocation of residents. The relevant departments and local governments should continue to improve environmental protection work, including the treatment of water pollution."

At least 1.24 million people have been relocated from the site of the hydropower project on the Yangtze River in central China, the audit office said

By the end of 2011, 207.87 billion yuan had been invested in the dam, far exceeding the original budget of 135.27 billion yuan in 1993, when the central government approved the project.

It was partly financed by loans from China Development Bank and corporate bonds, the audit office said. All the debts had been repaid.

The dam had produced 531 billion kilowatt-hours (KWh) of electricity by the end of 2011, substantially alleviating the electricity shortage in central, southern and eastern China, the audit office said. Last year, the mainland's electricity consumption totalled 4.96 trillion KWh.

Construction of the controversial dam began in 1994. Its first turbine was connected to the grid in 2003, with the final one connected last year.