A spate of corruption cases has focused the nation's spotlight
on officials in charge of building express highways.
In central China's Henan
Province, three consecutive directors of the provincial
Transportation Bureau, which oversees the building of expressways,
have been dethroned.
The latest, Tong Yanbai, vanished in early January when the
Xuluo Expressway, built under his watchful eye, was being
investigated for serious quality problems. He was found to have
left for Australia with an illegally obtained passport.
"I heard he has changed his name, and by now probably has
already got his green card," says one of his former colleagues.
In southern China's Guangdong Province, 32 officials were
charged in 2001 with taking bribes worth tens of millions of yuan.
Since 1990, all three of the general managers of the Guangdong
Expressway Construction Company, a unit under the provincial
transportation bureau, were found guilty.
In Sichuan
Province, Liu Zhongshan and Zheng Daofang, director and deputy
director of the provincial transportation bureau, were sentenced to
death penalty with reprieve and death, respectively, for embezzling
public funds and taking bribes of "extremely large amounts." Their
counterparts in Hunan, Guangxi and other provinces and autonomous
regions were fired.
The Beijing weekly Outlook reports there have been a
dozen prosecutions against people in these positions. According to
experts, it is time to shift the focus from individual greed to
rooting out the mechanism that sprouts this type of corruption.
Wang Zehe, who worked with two of the three deposed Henan
transportation bureau chiefs before becoming deputy mayor of
Xuchang, says the scandals have not only derailed the professional
lives of these people, but also tarnished the reputation of the
entire transportation system.
Boom and bribery
An expressway is probably the second most expensive mode of
transportation in terms of initial construction cost, next to a
subway. The current cost in China ranges from 11 million yuan
(US$1.3 million) per kilometer on the recently completed Guwang
Expressway in Ningxia to 115 million yuan (US$13.8 million) per
kilometer on the one leading from downtown Guangzhou to the city's
new airport.
Cost varies from 42.5 million yuan (US$5.1 million) per
kilometer on average in Guangdong to 29 million yuan (US$3.5
million) in Fujian.
There were no modern expressways on the Chinese mainland 20
years ago. The first one, an 18.5-kilometer stretch in a Shanghai
suburb, was completed in 1988. But since then there has been a
construction craze. In 2003 alone, 4,639 kilometers were added.
China now has the world's second longest network of expressways:
29,800 kilometers at the end of 2003. The plan is to extend it to
70,000 kilometers by 2010.
If you multiply the per-kilometer cost by the length, you begin
to understand the size of the industry and the magnitude of the
money involved.
One jailed former official is very descriptive: "There were so
many bribers around me that they stung me like locusts. Then people
drove me into jail as if they were herding a duck into the
pen."
When Zeng Jincheng assumed leadership at the Henan
Transportation Bureau in the aftermath of his predecessor's
disgrace, he pledged never to take a single penny in bribes. One
year later, he was found to have taken 40 bribes worth a total of
300,000 yuan (US$36,000).
The slogan of Zhang Kuntong, Zeng's successor, was that "the
expressways will be paved with clean governance." Before the echoes
of his words had faded, he had embezzled 100,000 yuan (US$12,000)
and accepted 680,000 yuan (US$81,000) and US$40,000 in
"sweeteners."
Meanwhile, construction flaws were so widespread and serious
that new roads often required immediate and constant repair.
The Zhengzhou-Xuchang section and the Xinxiang-Anyang section
were filled with so many potholes that huge sums were needed just
to get them back into working condition. The Luoyang-Sanmenxia
section had to be blasted away before it was completed because
everything built was substandard.
The Zhengzhou Yellow River Bridge, which links several
expressways, was designed to last 30 years. It opened in 1992.
Between 1995 and 1996, it underwent nine major repairs, eight
moderate ones and nine minor ones, costing a total of 64.0 million
yuan (US$7.7 million). The original price tag for the bridge was
only slightly more, at 75.5 million yuan (US$9.1 million).
Province-wide capital spending on expressways in 2001 doubled
that of the previous year, but the number of new roads did not. The
reason was that much of the money—4.0 billion yuan (US$481.0
million), to be exact--was spent on maintenance.
As a result, the expressway network in the province, which
should have been highly profitable, has been unable to break even
in the past couple of years.
Epicenter of power
The Henan Transportation Bureau collects 4 billion yuan (US$483
million) in various fees annually. On top of that, it gets 10
billion yuan (US$1.2 billion) in loans. Putting these together,
plus some other revenues, it handles about 15 billion yuan (US$1.8
billion) a year. The bureau acts as both the investor and the
manager. It determines which contractor gets what job.
None of these multimillion-yuan contracts is valid unless signed
by the bureau chief. So much power concentrated in one hand, says
Wang Zehe, the deputy mayor who used to work in this agency, can be
terrible or terrific, depending on the ethics of the person in that
seat. If he can hold the line, he can create something that will
benefit many generations. If not, it is a disaster waiting to
happen. And we all know what Lord Acton had to say about power and
corruption.
Inside sources reveal that the poor quality is the result of
cutting corners on processes and cutting costs on materials. For
example, contractors may use four-ton wheel dozers when they are
supposed to use eight-ton dozers; they may bulldoze for two days
when the work should take three.
An engineer who wishes to remain anonymous points out that when
the density of paving does not meet quality standards, the road
will sink under heavily loaded vehicles and may crack after rain or
sleet, eventually causing the concrete wires to break. "It is
actually quite easy to spot," says the source, "but inspectors who
have taken kickbacks tend to overlook these places. Many
inspections are just a formality."
Another not-so-secret secret is that officials are not
enthusiastic about daily maintenance because the money comes from
the smaller pool of maintenance fees. If you wait till the small
cracks turn into giant potholes, you'll need special funds, which
are much larger. And the more money one has at his disposal,
explains the engineer, the more cream he can skim from
contractors.
Contractors complain that they are often forced by the agency to
buy building materials from designated suppliers at inflated
prices. For example, when cement cost 198 yuan (US$24) a ton, one
builder was asked to buy from an agency-picked cement maker at 260
yuan (US$31) a ton. And this applies to almost all materials.
Sometimes a contractor will even be coerced to parcel out a
significant part of a job won through bidding to someone else who
did not even participate in the bidding process.
Due to its strategic location in the middle of the country,
Henan has 1,400 kilometers of expressways. As much as 60 percent of
the traffic on these roads comes from outside the province. Henan
Expressway Development Corp. Ltd., a spin-off of the transportation
bureau's expressway management office, has fixed assets in the
amount of 23 billion yuan (US$2.8 billion), making it the largest
state-owned enterprise in the province.
Tong Yanbai, the official who fled to Australia, was acting as
chairman of the board. As is customary in China, the government
agency and the business corporation are actually one entity with
two identities. People called him "Chief Tong" instead "Chairman
Tong."
And Chief Tong made sure that only he had the final say in
approving large spending.
Remedy
The Tong Yanbai case is still under investigation, and Jin
Daomin, head of the discipline team from the Ministry of
Communications, vows to get to the bottom of it.
In late 2003, Henan Province began requiring that personnel from
the discipline department supervise all expressway projects.
Experts argue that the crux of the matter is lack of check and
balance procedures in the capital spending process. All power is in
the hands of the government, which in turn gives it to one
department, where it ends up concentrated with a few
individuals.
The solution, they say, lies in the separation of government and
business, or the creation of a truly independent business unit that
can handle responsibilities in terms of cost and quality
control.
The law on bidding, which went into effect in 2000, laid down
the rules. But some local agencies have found ingenious ways to
bypass them, either out of local protectionism or personal
interest.
However, the 2001 regulation on whistle blowing concerning major
infrastructure projects has led to a series of prosecutions.
Wang Zehe suggests the building and maintenance of
provincial-level highways be managed professionally, with
cost-benefit analysis and financial responsibility. Surplus
personnel should be let go and costs be brought down. Those who
take investment risks should be allowed to reap profits.
The government, while giving more power to the business
community, should at the same time enhance its supervision.
Experts further suggest laws be passed to oversee economic
activities with a check-and-balance mechanism by outside elements
to insure that investment is protected from corruption. Projects,
capital and market should be handled by separate organizations.
In Henan, new regulations specify all projects with investment
in excess of 500,000 yuan (US$60,240) be open to public bidding.
Those projects worth 30 million yuan (US$3.6 million) or more must
be open on a provincial level to national and international
bidders. Those below that amount should be handled at the city
level.
As new measures are being created to halt the onslaught of
corruption, a giant billboard with a public service ad has been
erected along an expressway in suburban Beijing, urging people to
fight corruption.
The location of that billboard, it seems, is very apt
indeed.
(China Daily May 13, 2004)