China auditor finds Three Gorges on time, under budget

China’s National Audit Office (NAO) finds the 18,200-MW Three Gorges Dam is being implemented on time and under budget, despite some flaws in project management.

China’s Xinhua news service said 150 auditors spent six months studying Three Gorges, which already is in partial operation on the Yangtze River. (HNN 6/13/07) NAO said the project might be completed for about 35 billion renminbi (US$4.6 billion) less than planned in 1994.

China Three Gorges Project Corp., operator of the project, earlier reported it invested 131.3 billion renminbi (US$17 billion) in the project by the end of 2006 and planned to keep the total cost within 180 billion renminbi (US$23 billion), lower than the earlier reported US$25 billion.

The audit report said the project has played a better-than-expected role in flood prevention, power generation, and shipping.

�It’s possible to put the project into full operation by 2009 as planned, and the project is running a bit ahead of schedule,� the audit said.

Although NAO said overall quality control was fine, it found extra construction costs of 488 million renminbi (US$64.25 million) mainly due to construction contractors who exaggerated their costs.

�The problems are largely due to lack of laws and regulations and imperfection in internal control,� senior auditor Pan Xiaojun said.

China Three Gorges said it strengthened the implementation of public bidding to ensure fairness of results and strengthened contract language to prevent abuse. It said it corrected the use of 139 million renminbi (US$18.3 million) involving violation of rules. It added a total of 17 measures have been taken to improve management of the project.

The first unit of the right bank powerhouse began operation June 11. All 14 units of the left bank plant began operation in September 2005. Additionally, work has begun on installation of six more units in an underground powerhouse, which eventually will boost total capacity to 22,400 MW in 2010.

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