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RPT-China's top auditor says $45 bln of construction projects facing delays
October 8, 2015 / 10:01 AM / 2 years ago

RPT-China's top auditor says $45 bln of construction projects facing delays

(Repeats to fix formatting in 5th paragraph)

SHANGHAI, Oct 8 (Reuters) - Major Chinese construction projects worth about 286.9 billion yuan ($45.17 billion) are facing delays due to reasons such as slow fund distribution by local governments, the country’s top auditor said on Thursday.

Its comments are likely to fan concerns over the effectiveness of China’s renewed effort to pump cash into infrastructure to shore up its slowing economy, as it suggests that such investment is taking longer to ripple through.

The projects range from railways to housing.

Reuters reported in September that angry Chinese authorities have seized up to 1 trillion yuan from local governments who failed to spend their budget allocations amid an ongoing corruption campaign.

Of 815 projects inspected across 29 provinces in August, 193 worth 286.9 billion yuan were found to be experiencing significant implementation lags due to a lack of funds or poor initial planning, the National Audit Office said in a report published on its website.

Of 333 railway projects currently under construction, 99 were found to have a completion rate of investment - a measure of investment efficiency - of below 50 percent, while 20 had a completion rate of less than 10 percent.

For instance, two railways running from Dali city in the southwestern Yunnan city to the cities of Ruili and Baoshan had their completion date pushed out to 2019 from May 2014 due to slow disbursement of construction funds, the report said.

Similar delays were found in the construction of agricultural water-conservation projects and expressways, while major telecom operators were found to be behind schedule on data center completions, it said.

While the provinces are supposed to invest 12.43 billion yuan into major agricultural water-saving projects this year, only 708 million yuan had so far been invested at the end of July, it added.

Beijing plans to channel funds mainly into infrastructure projects to meet this year’s 7 percent economic growth target, sources involved in policy discussions told Reuters last month.

Some economists believe current growth levels are already much weaker than official data suggest.

China’s top planning agency, the National Development and Reform Commission (NDRC), has approved about 800 billion yuan ($126 billion) of railway, port and highway projects so far this year.

$1 = 6.3510 Chinese yuan renminbi Reporting by Brenda Goh; Editing by Kim Coghill

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