The Ministry of Transport yesterday announced measures to tackle illegal spending on infrastructure projects amid concerns hundreds of billions of yuan are owed to banks for highways projects. The scale of investment in infrastructure projects should not exceed the limits set by the central government, according to a statement on the ministry's website. 'Embezzlement of transport infrastructure funds and delay in project payment is forbidden,' it said. The measures will 'seriously address problems such as starting construction without approval and ban the approval of projects [by local governments] without proper government authorisation', the statement added. 'The Transport Ministry calls for strict regulation of investment and bidding, to seriously address problems like illegal and fraudulent tendering.' There are few problems involving highways managed by provincial-level governments and above. But there are many problems with roads managed by lower-level local governments, said Zheng Tianxiang, a transport specialist at Sun Yat-sen University in Guangzhou. In Guangdong alone, the total cumulative investment in expressways was 200 billion yuan (HK$233 billion) at the end of last year. Zheng said 200 billion yuan of principal was still owed to banks, although interest was being paid. The country's biggest banks are close to their full-year loan limits and will tighten lending to avoid exceeding their full-year quotas, Bloomberg reported. The fact that 200 billion yuan is owed to banks by Guangdong expressway projects despite the many toll stations collecting fees was partly due to corruption and inefficiency, Zheng said. Many expressways are built in remote parts of the province where there is not enough traffic to recover the costs through collected tolls, he said. 'Such expressways should never have been built in the first place,' he said. The country's fixed-asset investment on infrastructure excluding railways soared 35.7 per cent to 150.7 billion yuan last month. That is a much faster growth rate than the 17.9 per cent year-on-year growth for the first 10 months of this year, according to the Ministry of Transport. In the first 10 months, fixed-asset investment in infrastructure excluding railways reached 1.02 trillion yuan. State spending on roads hit a record 1 trillion yuan last year, fuelled by the central government's stimulus to tackle the global financial crisis, said Anderson Chow, Asia infrastructure research head at Macquarie. 'We're clearly seeing a year-on-year decline in approval of new highway projects already,' said Chow, who predicted the mainland's highway spending will start declining around 2012 after years of strong growth.