A recent report highlighted alleged severe corner-cutting in the construction of the lower reservoir dam at the Yong'an Pumped Storage Power Station in Fujian Province. The project, undertaken by subsidiaries of Power Construction Corporation Of China (PowerChina) (601669.SH)—including Sinohydro Bureau 3 and Sinohydro Bureau 16—has raised concerns over construction quality.
Further investigation revealed that the supervision unit, Zhejiang Huadong Engineering Consulting Co., Ltd. (Huadong Consulting), is a wholly-owned subsidiary of the design unit, Huadong Engineering Corporation Limited (Huadong Engineering), which itself is fully owned by PowerChina. This means the project's design, construction, and supervision entities all fall under PowerChina's umbrella, prompting industry skepticism about whether these parties can fulfill their roles independently.
Evidence obtained shows multiple supervisors from Huadong Consulting accepting hospitality from the construction team, including dining, drinking, and entertainment at KTV venues with paid companionship.
Public records indicate that Huadong Engineering and Huadong Consulting have frequently participated in bidding projects linked to PowerChina-affiliated companies. For instance, in the Fujian Hua'an Pumped Storage Power Station project, the two entities served as the designer and supervisor, respectively, while the construction was also handled by PowerChina subsidiaries.
Chinese construction laws explicitly prohibit supervision units from having subordinate or vested-interest relationships with contractors or material suppliers involved in the same project. The Regulations on Quality Management of Construction Projects further stipulate that supervision entities with such conflicts of interest should not oversee the project.
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