Auditor Reveals Irregularities with Spending on Beijing-Shanghai High-speed Rail

Economic Observer Online
Translated by Chang Qilong
Original article: [Chinese]

The National Audit Office (CNAO), a ministry-level government department charged with overseeing the spending of public funds, published the results of a report into the construction of the Beijing-Shanghai high-speed rail line project earlier today.

Auditors detailed seven serious problems that they discovered during a two-month audit carried out between May and July last year. The seven problems fell into four main categories.

These included cases of work on some projects beginning before the official bidding period had expired along with multiple cases of misappropriation of funds and false reporting of expenses.

Another problem identified by the auditors involved construction enterprises being paid in advance, meaning that when some of these enterprises failed to fulfill all the tasks included in the contract, the lost money could no longer be recovered.

The authors of the report also said there were instances were there was a lack of adequate supervision of spending. The audit report also mentioned once case of environmental damage as a result of the project around Nanjing.

The National Audit Office also announced that they will conduct another audit into the project in June this year. This year's audit will focus on some of the problems identified in the latest report, including misappropriation of funds and false reporting of expenses.

The 1,318 kilometer line, which began constrction in April 2008 and is scheduled to start commercial operation next year, will cut the travel time by train between Shanghai and the capital from the current 9-and-a-half to about 4 hours.

Almost 218 billion yuan has been invested in the construction of the new line, which is managed by the state-owned Beijing-Shanghai High-Speed Railway Co., Ltd.

Links and Sources
National Audit Office: 2011年第9号：“京沪高速铁路建设项目2010年跟踪审计结果”(Chinese)
Economic Observer Online: 审计署：京沪高铁1.87亿建设资金被挪用 (Chinese)