Dams and Landslides

New newspaper probes resettlement-budget shambles

Kelly Haggart and Mu Lan

November 21, 2003

Xiong Deming became a media star in China recently after the Premier himself suddenly appeared in her village and pledged to help her husband collect back-pay owing from a local contractor.

During a Three Gorges inspection tour Oct 24-26, Premier Wen Jiabao stopped in a remote village and asked local people to tell him their problems. Ms. Xiong said that a contractor owed her husband 2,240 yuan (US$270) for work on the construction of the new county seat of Yunyang, about 250 kilometres upstream of the Three Gorges dam.

Mr. Wen saw to it that the family had their money that very night. And Ms. Xiong soon found herself being whisked to the capital, where her story was featured on national television and covered widely in the official press.

But a brand-new Beijing-based newspaper that dug more deeply into the story traces the salary non-payment problem back to the central government itself.

The New Capital News (Xin jingbao) said in its Nov. 13 report that the money earmarked in the centrally funded resettlement budget to build new towns for people displaced by the Three Gorges dam is only covering about half the actual cost of construction.

Local governments, unable to make up the shortfall, lack the funds to pay contractors, who in turn don’t have the money to cover the wages of the construction workers they hire.

The problem is particularly acute in mountainous Yunyang county, where difficult and geologically fragile terrain has caused construction costs to escalate, the New Capital News said.

The daily publication, launched jointly by the Beijing-based Guangming Daily and the Guangzhou-based South China Daily, began appearing Nov. 11. The new venture proclaims admiration for The New York Times, and pledges to follow that newspaper’s example by “focusing on important events and investigating hot topics.”

The paper’s investigation into the Three Gorges resettlement-budget shambles centred on the construction of the new town of Yunyang. With 165,000 of its residents required to move to make way for the Three Gorges project, Yunyang is the county most affected by the dam-related resettlement. The new county seat, being built about 25 km upstream of the old one, will occupy an area of 5.4 square km, almost twice the size of the old town.

Because of the challenging topography, construction of the new town has involved some complicated engineering and soaring costs. The riverbank had to be strengthened, and steps had to be built up steep slopes to link the port with the new town. Ms. Xiong’s husband, Li Jianming, is a stonemason who worked on some of the hundreds of stairs that now connect the river and the town square.

When the project was finished last spring, Mr. Li was paid just US$130 of the US$400 he was owed. Zhang Peimin, the contractor who hired him, told New Capital News: “I can’t pay him in full because I haven’t received all the money that the county office in charge of construction owes me.”

While they wait to receive those funds, a number of construction companies have advanced their own money to complete the contracts they won. Qixia Construction Company, for example, says it has paid US$1.6 million up-front to cover the costs of its projects. It also contracted out some of the work, including the mountain staircases that Mr. Li helped build.

Qixia project manager Xu Jie explained the company’s position: “Yes, we do owe the workers money, as much as US$12,000 in all. But this is because we haven’t received all the money we need from the county government. One problem is that the project overran the budget by US$60,000, and the county government has not paid us the difference.”

The construction of new schools has been another problem area. So far, 31 of the 100 new schools that are needed in Yunyang county have been built. But contractors have had to advance about half of the US$18 million that has been spent to date on the school-building program, according to Chen Hanmei, a finance official with the county education bureau. Some schoolchildren have had to stay home as companies have padlocked school doors to press for payment of money they are owed.

Yunyang county governor Xiao Min says that funding problems have plagued construction of the new county seat from the outset.

“We have spent US$250 million on building the new town since construction began in 1992, but only about US$130 million, or half the amount needed, was available from the resettlement budget set by the central government,” he said. “So each year of the past decade we have run up a deficit of about US$12 million. In 2002, for instance, we received $19 million, but spent $32 million on construction.

“We lack the funds we need to build the new town,” he said bluntly.

County officials attribute their predicament to two main factors. They say the central government used low and outdated standards in calculating the resettlement budget, and that insufficient consideration was given to the financial implications of building in a mountainous, geologically unstable region.

Local officials are unhappy that the infrastructure component of the resettlement budget assumed that the new county seat would look much like the old one, with the financial calculations all based on the size and the standards of the old town.

“If local officials had allowed the streets in the new Yunyang to be built just as narrow as they were in the old town, we would have been criticized by local people,” Mr. Xiao explained. “Of course they want to take advantage of the resettlement-related construction and have wider streets in the new town. So we built the streets as wide as 40 metres, but the central government had only budgeted for the old width of 24 metres. We have also built much bigger offices in the new town, and thus the gap between the budget and the actual cost of construction.”

The rugged nature of the region is another complicating factor. Extra expenses have been incurred as contractors contend with the special problems of mountainside construction, including steep slopes, fragile riverbanks and the threat of landslides.

The Yunyang county government has repeatedly asked Chongqing municipality for additional funds to deal with the problems presented by its terrain. So far, all such requests have been turned down. Other places facing the same issues have made similar appeals, but only the worst-affected counties, Fengjie and Wushan, have received extra funding after an assessment by the central government.

Meanwhile, Wushan county has announced a plan to build a US$50-million statue that will be taller than the 93-metre Statue of Liberty in New York. The proposed Wushan Goddess would stand 138 metres tall at the confluence of the Daning and Yangtze rivers, the Chongqing Business News (Chongqing shangbao) reported on Nov. 17. Wushan – and Beijing – must be praying that the goddess will attract tourists who will arrive in droves to pour their own money into the cash-strapped region.

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