China Clamps Down on $72 Billion Illicit Power Plants
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CHINA: January 4, 2005
SINGAPORE - Beijing is clamping down on the construction of hundreds of small power plants eating up $72 billion in mostly state funds, fearing they could waste money by tipping the country into a power surplus, industry experts say.
The State Council, China's cabinet, has told provincial governments and power firms to report by Friday on all power plants under construction and ordered the immediate shutdown of unauthorised ones, sources said.
The plants, in the booming east and other parts of the country, could add 120,000 megawatts (MW) of capacity, at least three times China's power shortage this year and enough to power the UK one and half times over.
In a scramble to address the country's worst power crunch in decades, developers backed by local governments borrowing money from state banks have started building the plants this year, without the required approval from Beijing.
They are coming up as huge state-sponsored projects are set to come online by next year and boost capacity by almost a third to 504,000 MW from 384,500 MW by end of 2003.
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