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Beijing to streamline bidding for $14 bil. in Olympic projects.

BEIJING, July 31 Kyodo

China will establish a special committee to staunch kickbacks and insure fair bidding open to foreign firms for $14 billion worth of contracts Beijing has tied to the city's hosting of the 2008 Olympic Games, officials and businessmen told Kyodo News.

The government has given strong indications Olympic tenders would be handled far more openly than in comparable projects in the past, businessmen and diplomats said.

''Officials are saying the government is reevaluating its whole approach. They're saying, 'we're going to use this as a tool for opening up','' said Husayn Anwar, managing director of Sinosphere, an environmental consultancy. He added, however, the exact procedures were not yet to be determined. ''They're still playing quite close to the vest right now.''

The process of bidding for government projects in China is notoriously closed and corrupt, and typically ''70% of development money gets lost under the table,'' according to one developer.

Projects related to the Olympics, however, will likely get special treatment and may establish a model for more consistent and open bidding practices, which China has already committed to in its World Trade Organization (WTO) accession agreements.

''Obviously, there's a past history of discriminating against foreign companies,'' said one Western diplomat. ''But in terms of the Olympic building there's a different feel. The world's eyes are upon them.''

Bidding for the projects will be overseen by a special office set up for the purpose, under the Beijing Olympic Games Organizing Committee that is to be established in September out of the Beijing Olympic Bid Committee, said an official who gave only the surname Ping.

Some projects are being vetted in the meantime, but most will have to wait until the committee is established.

''At the moment there is very little information,'' said one foreign real estate developer who hopes to win some Olympic contracts.

When Beijing hosted the Asian Games in 1992, there was almost no foreign involvement and construction was handled almost entirely by Beichen Construction, a company with close ties to the city government.

The developer, who asked not to be named, said he was confident things would be different now. ''There has been a lot of improvement on this issue since the Asian Games, things are much more professional than 10 years ago.''

For starters, Beijing is going to ask for bids for a new master plan for the Olympic Village, the developer said. ''The original plan was just for application purposes, now they are going to tender it globally.''

Beichen will still play a major role, however, he said. ''They have a very substantial investment in the area'' where the Olympic Village is to be built. But the wider private sector is already much more involved than in the past, he said. The government officials who are to handle the bidding ''are committed,'' he added.

Planners have tied a wide array of projects to the Olympics, partly to impress the International Olympic Committee with Beijing's commitment to hosting the games, but also to insure more efficient oversight, businessmen said.

China's official Xinhua News Agency reported last week that $1.6 billion will be allocated to build 19 new sports facilities and renovate 13 to make them ''the most advanced venues...in the world.'' In addition, the Chinese capital will spend $3.6 billion building roads and railways, adding 100 kilometers to its subway system. And $8.6 billion has been earmarked for ''environmental protection projects'' that will construct waste-treatment plants, replace and relocate dozens of coal-burning power generators and factories, and install natural gas infrastructure to provide an alternative to coal, still used by most of Beijing for heating and cooking.

The Olympic projects constitute the larger part of Beijing's $23 billion budgeted for overall infrastructure development in the next five years. But only projects ''with an Olympic label'' are likely to be subject to the special ''streamlined'' process designed to showcase China's new openness. Others are likely to pass through the ''traditional system,'' Anwar said.

Many of the projects now linked with the Olympics would happen anyway, but ''the way they are going to happen is really the question,'' he said. Hitching them to the Olympics helps to subject them to sharper scrutiny.

Beijing's Olympics and China's impending accession to the WTO are being used to carry through reforms, and both seem now to have given a boost to voices calling for openness, Anwar added.
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Publication:Asian Economic News
Date:Aug 6, 2001
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