Three Gorges Dam determined to rectify financial problems

BEIJING - China's hydropower producer, operator of the Three Gorges Dam, has said it will have to deal with some financial problems that were uncovered during a recent government audit.

The China Three Gorges Corp, which operates the world's largest hydropower project, on Sunday confirmed the audit's findings and said it is taking steps to improve management.

The National Audit Office (NAO), the country's primary auditor, released its findings on 17 State-owned enterprises (SOEs) this past Friday. It indicated that some of the companies, including the Three Gorges Corp, have financial problems.

"The NAO findings are a true reflection of our company's problems and will be helpful in regulating management and guarding against operational risks," said Sha Xianhua, vice corporate director.

According to Sha, the NAO report points to 31 financial issues in accounting, finance management, investments, bidding and corporate management.

"Ten of the problems in the findings have already been dealt with and we're still working on the others," Sha said.

He added that his company will take some lessons from the audit and continue to improve management.

In 2007, government audits found that the dam's contractors had overcharged the country by nearly 500 million yuan ($77 million). Meanwhile, local governments had used nearly 300 million yuan, intended for resettling people displaced by the dam, for other purposes, such as loan repayment and office remodeling.

In fact, the auditor regularly reports problems at State-owned companies after official audits.

The revelation of financial improprieties at the world's largest hydropower station came just as the dam began discharging more water to the middle and lower reaches of the Yangtze River.

It increased flow levels on Friday to ease the severe drought that has plagued rice-growing areas downstream for months.

The dam, which is mainly in Hubei province, has discharged 17 billion cubic meters of water to areas downstream since the beginning of this year.

From May 20 to 24, it will increase its discharge rate to 10,000 cu m per second, about 3,000 cu m greater than the inflow, the State Flood Control and Drought Relief Headquarters said.

The rate will be increased to around 11,000 to 12,000 cu m per second between May 25 and June 10.

Water levels in the middle reaches of China's longest river have risen by 0.63 m and in the lower reaches by 2.12 m, from record lows.

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During the January-April period, the Yangtze River basin received 40 percent less rainfall than the average over the past 50 years.

Dwindling river levels have affected agricultural irrigation and water supplies for daily use, seriously affecting some parts of Hubei and Hunan provinces.

The Three Gorges Project consists of a dam, a five-tier ship dock, and 26 hydropower generators. The project generates electricity, controls flooding, and adjusts shipping capacity. The project was begun in 1993 with a budget of about $22.5 billion.

China Daily - Agencies

(China Daily 05/24/2011 page15)