Supervision officials connected with the massive Three Gorges Dam project have announced that a total of 349 people have been involved in 310 cases of misuse of resettlement funds since construction of the world's largest hydropower station began in 1994.

"By the end of 2003, about 58.7 million yuan (US$7.1 million) in resettlement funds, or 0.1 percent of the total budget for relocating the 1.3 million people who had to make way for the project, was embezzled, misappropriated or illegally used," a supervision official said.

He stated that 43.0 million yuan (US$5.2 million) of the money had been recovered, and all of the embezzlers, including 166 officials, have been severely punished.

"All investment has been well controlled, with resettlement funds operated safely and effectively," Pu Haiqing, minister of the Three Gorges Project Construction Committee Executive Office, confirmed in his latest report released on Monday. The committee's Executive Office is answerable directly to the State Council.

Xia Kailiang, deputy director of the Executive Office's supervision department, said last weekend that all accused officials have been convicted and punished.

The biggest case thus far was that of Huang Faxiang, the former head of the Fengdu County Land Resources Bureau, who embezzled 12.0 million yuan (US$1.4 million) from land sales. Huang was sentenced to death and executed.

Wang Sumei, an accountant at the Wanzhou District Relocation Bureau in Chongqing Municipality, received a life sentence for using more than 1 million yuan (US$120,000) of resettlement funds for gambling.

This is the first time that the Three Gorges supervision department -- an internal watchdog set up to scrutinize the project's budget -- has revealed details of fund scandals.

Embezzlers took the greatest amount of money, with 97 individuals involved in stealing about 17 million yuan (US$2.1 million). Bribery was more widespread, with 192 people involved in 12 million yuan (US$1.4 million) worth of bribes.

Another 24 were charged with malfeasance involving approximately 17 million yuan (US$2.1 million).

However, according to the latest report from Xia's office, "resettlement is proceeding smoothly with intensified auditing and supervision systems put into operation over the past decade."

Xia said that the government has established management and supervision systems to strengthen oversight of the project's construction funds. However, he admitted, "the huge amount had to be appropriated from the central government to local governments level by level, thus leaving opportunities for embezzlers."

"Most cases of embezzling public funds took place at the grass-roots level, in units spending the money, or by officials responsible for it," Xia said.

State-level auditors were sent to units responsible for resettlement to purge any officials guilty of corruption after several major cases of embezzlement were reported.

As control over the disbursement of funds was ratcheted up, senior central government officials warned local officials not to lay a finger on the money for any other purpose other than resettlement.

Information leaflets were also distributed to locals to tell them about official compensation procedures and how much money they could get for their flooded land and housing.

Xia reported that as a result of improved monitoring, the annual number of cases of embezzling resettlement funds fell from 43 in 1995 to 15 in 2003.

By 2009, a total of 1.1 million people will have been displaced by the Three Gorges project.

So far, more than 965,500 have been removed from the reservoir area, which stretches some 600 kilometers from Yichang in Hubei Province to Chongqing Municipality. More than 34 million square meters of housing has been completed for the displaced people.

About 166,000 former residents of the Yangtze riverbank area have been moved to over 1,000 towns in 11 other provinces to "ensure a better environment in the reservoir area."

About 1,400 factories along the Yangtze River were also moved or shut down.

By the end of last year, 51.9 billion yuan (US$6.2 billion) had been pumped into the Three Gorges Dam and hydropower station, while 43.0 billion yuan (US$5.1 billion) was spent resettling residents from the reservoir area.

(China Daily March 29, 2005)