New Revelations in China’s Railway Corruption Scandal

The Wall Street Journal blog has yet more details on the corruption case against Li Zhihui, former Railway Minister, and its implications for the development of high-speed rail in China (and the U.S.?):

On Wednesday, the state-run Xinhua news agency said a government audit report shows embezzlers made off with 187 million yuan, or roughly $28.5 million, from just the Beijing-to-Shanghai portion of the high-speed railway project–a revelation that reinforces earlier doubts about implementation of the massive rail expansion.

The latest numbers come from the same interim audit report, produced by the National Audit Office, that originally brought down Mr. Liu, who was made to step down in February. Xinhua now says that the audit could pave the way for other arrests for corruption and embezzlement.

The steady drumbeat of revelations could spell a grim fate for Mr. Liu in China, which has a record of executing high-profile officials accused of corruption.

Relative to the overall amount of money being funneled into the high-speed rail project, the amount that Xinhua said was embezzled on the Beijing-Shanghai line is small. The Beijing-Shanghai line involved total investment in the range of $33 billion, meaning embezzlers made off with less than a tenth of a percent. But if other Chinese infrastructure projects have seen larger chunks of their funding disappear into the pockets of corruption officials and contractors, few others have been as highly touted.

Read more about Liu Zhihui and high-speed rail via CDT.



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