Three Gorges Resettlers Lose Out to Corruption

by Susanne Wong
Thursday, February 1, 2007

Chinese auditors have discovered that at least US$30 million was embezzled from resettlement funds for the Three Gorges Dam in 2004 and 2005, according to China’s state media. China’s National Audit Office (NAO), which released its findings in late January, admitted that actual figures could be higher.

The money was supposed to be used to build houses and infrastructure for resettlers and to assist them in establishing new livelihoods. Instead, local authorities in Hubei province and Chongqing municipality reportedly embezzled $34.8 million to pay off government debts, pay staff salaries, construct buildings and open government- run businesses.

In this latest corruption scandal on the project, state auditors found that local authorities claimed an additional $2 million to pay non-existent workers. Some construction businesses also overcharged for resettlement projects.

The NAO found the discrepancies after surveying 10 districts and counties in Hubei province and Chongqing municipality. The survey covered funds distributed in 2004 and 2005. However, because the audit did not cover all affected areas or the distribution of funds in 2006, the amount of money misappropriated could be higher.

Two weeks after the findings were released, Xinhua News Agency reported that all funds misappropriated in Hubei province had been recovered. Project officials urged Chongqing municipality to follow suit.

"Local authorities must recover the money before the end of March, or else the officials concerned will be held responsible,” said Xia Kailiang, director of the Supervision Bureau with the Committee for Construction of Three Gorges Project. Five cases of corruption have already been referred for judicial and disciplinary action.

Ongoing Corruption

At least $50 million was misappropriated from the project during its first six years of construction. Supervision of the Three Gorges project has been tightened periodically by the government to help clamp down on corruption. Several officials were executed for embezzling funds.

An estimated 1.4 million people have been displaced by the Three Gorges Dam. At least 50,000 more will be resettled this year. The majority of people have been resettled in Hubei and Chongqing, while others have been relocated to eastern and southern provinces.

China’s vice-premier Zeng Peiyen recently called on local authorities to improve the lives of Three Gorges resettlers. He instructed officials to ensure that people are relocated in a timely manner, are able to Three Gorges Resettlers Lose Out to Corruption by Susanne Wong live stable lives and have opportunities to raise their incomes, reported Xinhua.

However, local officials are struggling to cover a variety of costs besides resettlement, including mitigating siltation and solid waste build-up in the reservoir. Although the central government is responsible for managing the reservoir’s water quality and has promised $2 billion to help build sewage, trash and garbage disposal facilities in all urban areas in the dam area, Interfax reports that there have been delays with construction of some facilities due to lack of funds.

In December, hundreds of residents in Hubei province planned a protest to demand full compensation for Three Gorges resettlement and to denounce corruption of funds by local officials, reported Asia News. Residents said they had received only $645 of the $4,900 entitled to them for land exappropriation. They also claimed they had received virtually nothing of the annual $77 living expense subsidy promised to them.

A local resident stressed the urgency of attending the demonstration despite threats and potential repercussions by the government. “Officers from the Public Security Bureau have been on alert and they have been following some of the ordinary citizens in this county,” he said. “But still we need to have our voices heard because without this money, we have great problems making ends meet.”