By Morten Rønning
The highly controversial Chinese dam project Three Gorges on the Yangtze river faces ever new problems. No sooner had the authorities cleared up the extensive financial wrongdoings, than questions are being raised about takers for the expensive power from the installation. Both Kvaerner and AGN/Veidekke are among the suppliers to the Three Gorges project, both with GIEK guarantees (see NorWatch 7/97, 10/98 and 23/98).
Last January, China's national auditor stated that some USD 600 million of the funds earmarked for resettlement of the people losing their homes to the project, had been embezzled. This made up about 12% of the total funds set aside for this purpose. Later, the figure was adjusted to 7.4%. Supposedly, 80% of the money that ended up in the pockets of public officials have now been retreived. The South China Morning Post says the officials have been sentenced to severe imprisonment.
The former manager of the district development office in Fengdu was sentenced to death on February 25 this year, for having embezzled 12 million yuan (USD 1,4 million). In May last year, a female employee of the migration bureau was sentenced to life imprisonment for corruption in connection with the forced resettlement.
In January, the French newswire AFP said prosecution had begun of 14 officials suspected of corruption. One month later, the official news agency said about 100 people had been punished for corruption.
The extensive embezzlement has delayed work on new housing for those forcibly resettled. Only 60% of the planned new housing was completed by 1998.
It is doubtful whether there are any takers for the power that the plant is supposed to start producing from 2003. The plan was for ten surrounding cities and provinces to buy power from the plant. Today, however, none of these need increased supplies. At the same time, these provinces are pressing for the construction of more nuclear and thermal power plants, which are more profitable for the provinces. The South China Morning Post quotes former deputy managing director Yuan Guolin in the Three Gorges Development Company, the developers.
Doubts about electricity demand as well as persistent technical difficulties have led to the indefinite postponement of the planned stock exchange listing of the Three Gorges Development Company. Nor does the company need fresh capital, for as long as the government is making enough capital available for the prestigious development, said the South China Morning Post on March 10.
According to the Financial Times for March 10, the World Bank-financed Ertan dam is struggling with similar problems. As much as 60% of the electricity produced by this plant is without takers. The developers have been forced to dump prices to improve sales. Both Norconsult and AGN/Veidekke were involved in the Ertan development, which was completed in 1998, and led to the forced resettlement of more than 30,000 people.
Norwatch Newsletter 5/00