$45.5m of Three Gorges relocation fund misused: audit

Around 279 million yuan (US$45.5 million) set aside for the relocation of residents during the construction of the Three Gorges Dam has been misused or misappropriated, the National Audit Office said yesterday.

Most was used for projects that had nothing to do with relocation or for administrative management fees, China's top auditing office said, citing the results of an auditing campaign between June 2011 and February 2012.

Local authorities in Hubei Province and Chongqing Municipality have recovered all the misused money and will redirect it for resettlement expenses, the audit office said.

By the end of 2011, the central government had allocated a total of 85.7 billion yuan to relocate residents and factories surrounding the Three Gorges Dam. Almost 1.3 million people were resettled to make way for the hydroelectric dam spanning the Yangtze River.

The audit office attributed the cause of problems to the complicated level of construction, the long-lasting construction period, difficulties in relocation and the incomplete regulations and systems in the early stages of the project.

The audit also found 35 cases where funds totaling 113 million yuan were misappropriated. Eleven people have been punished and more will be the subject to a criminal investigation as cases have been transferred to the police and the Party disciplinary office.

Construction mismanagement led to an extra investment of 808 million yuan in the building of the world's largest hydro-power project, the auditing watchdog said.

Other irregularities in bidding, project contracts, accounting and equipment management were also found.

The Three Gorges project was designed to produce electricity, reduce the potential for floods downstream and increase shipping capacity on the Yangtze River.

The 1,983-meter-long, 185-meter-high dam was completed and fully operational in July when its final turbine joined the national grid and the facility reached its full capacity of 22.5 gigawatts.

Last year, the Three Gorges Power Plant generated 98.1 billion kilowatt-hours of electricity, according to the China Three Gorges Corp.

The project was launched in 1993 with a planned budget of 180 billion yuan.