The State Development Planning Commission (SDPC) launched a massive inspection campaign yesterday on nationwide construction projects with investment from Treasury bonds issued by the central government since 1998.
SDPC officials said inspectors will go to 14 provinces to examine project quality and fund management.
The projects focus on roads, railways, bridges and grain depots built with Treasury bonds and investment by provincial and local authorities.
"Regular supervision of management and use of such bonds is necessary," said an official from SDPC's Key Project Inspectors Office.
China has made proactive fiscal policy its main tool in macroeconomic management since 1998 so as to avoid negative effects of the 1997 Asian financial crisis.
About 150 billion yuan (US$18 billion) worth of long-term Treasury bonds was issued last year, bringing the total bond issue from 1998 through 2001 to 510 billion yuan (US$61.4 billion).
Another 150 billion yuan (US$18 billion) will be issued this year mainly for Treasury bond-financed projects under construction, development projects in the western region, technological transformation of key enterprises and water diversion from the south to the north.
During the 1998-2001 period, 510 billion yuan (US$61.4 billion) was invested in more than 8,600 projects nationwide.
SDPC statistics show that 4,600 projects were finished by the end of last year. The other 4,000 projects are still under construction.
The commission, China's highest economic planning authority, said yesterday in a circular that strengthening public bidding for construction projects is a good way for officials to supervise the projects.
"Although builders of most of the key projects with investment by the central government were found through public bids, problems still exist," the circular said.
Public bidding for construction contracts fosters fair competition among firms in the construction sector and helps save construction investments while guaranteeing the quality of the projects, officials said.
But the practice has been undermined by regional protectionism, monopolies and under-the-counter deals, officials said.
Due to lack of supervision and lax enforcement of bidding laws, irregularities run rampant in some areas of the country, the circular said.
To curb the illegal manipulation of the bidding process and ensure the quality of construction projects, government departments should focus more attention on bidding.
(China Daily May 22, 2002)
