Corruption Hits China’s High-Speed Railway

Investigators have found evidence that nearly $30 million of funds budgeted for China’s Beijing-Shanghai high-speed rail line was misappropriated last year, in another blow to the country’s scandal-plagued high-speed rail sector.

Workers assist at a construction site of the Chengdu-Dujiangyan railway.
China Photos | Getty Images
Workers assist at a construction site of the Chengdu-Dujiangyan railway.

China’s state audit office said on Wednesday it had identified numerous cases of embezzlement and other irregularities from just a three-month period of construction on the Beijing-Shanghai high-speed line last year and has passed the cases on to judicial authorities for formal investigation.

China’s railway minister and the rail ministry’s deputy chief engineer were both removed from their positions last month for “severe disciplinary violations” — an allegation that usually results in criminal charges for corruption.

The former minister, Liu Zhijun, is the most senior government official to be implicated in corruption in the past five years and his downfall has raised doubts about the future of the hugely ambitious high-speed rail expansion plans he championed.

Neither Mr Liu nor Zhang Shuguang, the former deputy chief engineer at the rail ministry, have been named in connection with the state auditor’s investigation into the 1,318km, $33 billion Beijing-Shanghai high-speed rail project, which is scheduled to open to the public next year.

The line is the longest and most expensive high-speed rail project in the country but it has been dogged by scandals and controversies and singled out in previous state audits for financial “irregularities”.

In its latest report the auditor also cited numerous cases of flawed procurement procedures, overcharging, unexplained costs and fake receipts related to the project.

When completed, the railway should reduce travel time between the two cities from about 10 hours now to four hours.

China’s top leaders had already ordered a rethink of the country’s plans before the removal of the rail minister last month but following his dismissal the review has intensified, say industry analysts and Chinese media reports.

China has about 17,000km of high-speed railway built or under construction, by far the longest network in the world, and officials have said projects that have started will not be affected by the review.

The government has said it plans to spend nearly $130 billion this year on railway construction and this plan is unlikely to change, according to officials at China Railway Construction, builder of more than half the country’s railroads.

But future expansion and proposed lines will be scrutinized and possibly cancelled.

An intense safety review of all projects is under way because of fears that corruption and the speed with which the network has been built will result in poor quality tracks that are meant to carry trains travelling at up to 380km/h.