• Implementation guidelines for the Government Procurement Law, which came into effect in January 2003, have been drafted and are under review. Related measures including guidelines on procurement procedures, registration of bidding agents and evaluation mechanisms for central procurement bodies have also been drafted and several of them were expected to be approved in late 2004.
Corruption in China’s booming construction sector As the Chinese economy gallops ahead, the huge investment in new infrastructure projects combined with weak enforcement of contracting regulations has created numerous opportunities for corruption. Local officials play a decisive role in the tendering process and in many cases have ignored the relevant regulations. From 1997 to the present, 14 directors of transport in nine provinces have been investigated for corruption. Three successive heads of transportation in Henan province were caught taking bribes and convicted for complicity in other crimes.1 Similar malpractice exists in land development and real estate. China is feverishly modernising its cities. Large numbers of old houses are being swept aside to make way for new high-rise offices and dwellings. This process not only offers opportunities for officials to misappropriate the property in their charge, it provides tangible evidence of their ‘professional achievement’ and improves their career prospects. With such a skewed motivation, it is little wonder that officials become spellbound by ‘image projects’ that can have serious consequences on the longterm development of the local economy. Investors have been induced to tie up their savings in projects that fail to materialise, while householders have been forced by corrupt municipal councils and provincial governments to move out of their homes, which are then demolished and the sites developed. This phenomenon has sparked popular protests around the country, especially on the fast-growing coast and in the capital, Beijing.
At the presentation of his ‘Work Report’ in March 2004, Prime Minister Wen Jiabao reiterated his demand that confiscation of land be strictly controlled and carried out with due consideration for the law and for planning priorities. Flooded with complaints, the country’s chief prosecutor announced in December 2003 that the fight against corruption in the real estate sector and in construction project tenders would be a high priority for his offices in 2004. There have been some improvements to the legal framework in recent years. In January 2000 the Tendering and Bidding Law entered into force, and the construction ministry subsequently issued a series of regulations on the tendering process for urban infrastructure and civil construction projects specifically. As early as 1994, the construction and supervision ministries helped promote the Tangible Construction Market (TCM), a market for open tendering and bidding for civil or urban infrastructure construction projects involving investment from the government or majority state-held companies. Currently 325 of China’s 336 cities have established similar procurement centres. Although the TCM has had some impact on reducing corruption in procurement, it remains under-resourced and under-utilised. In May this year the government introduced blacklisting for building contractors convicted of bribery in five areas – the provinces of Jiangsu, Zhejiang and Sichuan, Chongqing municipality and Guangxi Zhuang Autonomous Region. Under this pilot scheme, the blacklist will be made available to local governments and those responsible for construction projects in these areas. Debarment can be either temporary or permanent. The scheme is
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