The central government's "half-price" subcontracting of the central political and legal infrastructure project will be punished by the local government

Our reporter Hao Cheng reports from Beijing

With a total salary of less than 200,000 yuan, three small teams have been chasing all parties for half a year, but they have not been able to settle it so far, and there is not even a definite statement. On the evening of January 2, 2024, the heads of the three work teams all told the reporter of China Business News that despite this, they still firmly believe that the problem will be solved.

"This is not an ordinary project, the owner is the Public Security Bureau, and people will not pay the bills. Right?", said a drunk foreman. Indeed, the Yuzhou Detention Center they participated in the construction is a central political and legal infrastructure project and a local key project, which is built with funds invested by the Ministry of Public Security, Henan Province and Yuzhou City, and the winning bidder is the central enterprise China Railway 23rd Bureau Group Co., Ltd. (hereinafter referred to as "China Railway 23rd Bureau").

They may not know that the Yuzhou Municipal Public Security Bureau, as the owner, is also aggrieved: the detention center, which was supposed to be completed in May 2022, has not been delivered 19 months after it was overdue. This complex situation stems from a bizarre subcontracting - after China Railway 23rd Bureau won the bid for nearly 100 million yuan, it was subcontracted to a private enterprise with more than 55 million yuan.

With the unexpected death of Yang Yongsheng, the head of a private enterprise, the contradictions and problems hidden in this "half-price subcontracting" broke out rapidly, which also led to the fact that all parties have not been able to make fundamental changes after working hard for more than half a year. The only thing that is certain at the moment is that the local regulatory authorities have confirmed that this is a suspected illegal subcontracting.

The reporter noted that at the end of the year and the beginning of the year, many places launched a special action to crack down on illegal subcontracting and subcontracting in the field of engineering construction, and the data showed that there were 399 illegal subcontracting projects investigated and dealt with in mainland China in 2022, accounting for 4.7% of the illegal acts in the construction market, accounting for a small proportion. "But the corruption and quality issues that have emerged in specific cases remind us that we still need to continuously improve the level of governance. A person from the housing and construction department said in an interview with a reporter from China Business News.

Subcontracting chaos

According to public information, the Yuzhou Detention Center project was tendered in May 2020, and in June of the same year, China Railway 23rd Bureau won the bid with more than 98 million yuan. Since then, the official website of China Railway 23rd Bureau has also released two pieces of information about the progress of the project, one of which is a site map, which seems to be the central enterprise is making every effort to promote this key project.

But for the specific construction team, the scene is a little strange. A person in charge of the labor team told reporters that when he and the workers were constructing, he was docking with Yang Yongsheng, the boss of a private enterprise, and Yang Yongsheng was the biggest "boss" on the construction site, not only responsible for the wages of the workers, but also responsible for the procurement of materials.

"The identity information of our workers has been reported, saying that it is to make accounts for the 23rd Bureau of China Railway, but the wages paid have been notified to be withdrawn. In fact, very little is given to us every month, so it is very difficult to calculate the account today. The person in charge of the work team told reporters that he knew at the time that this was a sign of subcontracting, but he did not expect the follow-up situation to be so complicated.

In April 2023, Yang Yongsheng suffered a sudden cerebral hemorrhage at the construction site and died 4 days later after rescue efforts failed. Subsequently, when the family sorted out the information, they found that the agreed price of Yang Yongsheng when he contracted the project was only about 55 million yuan, which was barely half of the winning price. At the same time, Yang Yongsheng's earlier problem of owing a large amount of project money and private loans in order to advance funds for construction was also made public.

What was also made public was the relevant details of the subcontracting: the winning bidder, China Railway 23rd Bureau, signed an agreement with Wanli Company and Shihe Company, and the latter two companies signed agreements with Jiuding Company, which is actually controlled by Yang Yongsheng. This is also evidenced by the material suppliers for subsequent debt collection.

The reporter learned from the local area in Yuzhou that before Yang Yongsheng passed away, the main construction of the project was completed, and the overall completion progress was estimated to be 80% to 90%. After the death of Yang Yongsheng, the project was temporarily suspended, and the general contractor, China Railway 23rd Bureau, continued construction, but the project has not been completed and delivered.

Fang Yuzhou Municipal Public Security Bureau, the owner of the Yuzhou Detention Center project, told reporters that more than one-third of the payment has been made according to the construction progress, and at the end of 2022, the local government has paid 5 million yuan urgently because of migrant workers' wages. A person from the Yuzhou Municipal Housing and Urban-Rural Development Department said that because the relevant procedures of the project are still being gradually improved, it was not included in its regular supervision scope earlier, and after receiving the relevant report in July 2022, the housing and urban-rural development department immediately launched an investigation.

By early December 2022, the local housing and urban-rural development department told the media that the results of the investigation confirmed that the project was suspected of illegal subcontracting, and that "a month ago, the case was transferred to the Municipal Comprehensive Law Enforcement Bureau in its entirety." On January 1, 2024, a person from the Yuzhou Housing and Urban-Rural Development Department confirmed this information to reporters again, but refused to disclose the previous daily supervision.

Reporters from multiple directions confirmed that there is a face recognition device at the entrance of the project, but there is no network link with the housing and construction department. The relevant construction personnel said that they had never seen or heard of the inspection by the housing and construction department at the construction site of the project. But there were indeed personnel from the 23rd Bureau of China Railway on the project.

"Because the formalities are not complete, there is a lack of daily supervision, and this logic is fundamentally wrong. The largest number of cases of violations of laws and regulations in the construction field is investigated and dealt with every year in the mainland, especially since this is a basic project of the central political and legal system. A person from the housing and construction department told reporters.

According to data released by the Ministry of Housing and Urban-Rural Development, in 2022, the mainland investigated and dealt with "6,858 projects with other construction market violations such as starting construction without obtaining construction permits, accounting for 80.5%".

"Penetrating Law Enforcement"

Since September 2023, the reporter has communicated with a number of relevant personnel of China Railway 23rd Bureau about the "subcontracting incident", and they all said that the "subcontracting incident" is not half price, and media reports that after Yang Yong's illness and death, it is not true that "orphans and widows" were bullied. "Saying that we refuse to show the accounts and refuse to settle the bills does not exist, we have been promoting this matter, and we have also been in contact with the family. ”

According to media reports, the settlement of the project payment between the two parties also involves tens of millions of financing on the "partner financing" platform. "Partner Finance" is a financing platform under CRCC, on which suppliers who have a cooperative relationship can initiate loans from banks, and banks will provide suppliers with a certain percentage of loans according to the amount owed to suppliers by CRCC's projects.

For the total amount and interest of "partner financing", there are big differences in the statements of China Railway 23rd Bureau, Jiuding Company and Shihe Company. According to a number of correspondence letters, Jiuding had proposed to allow it to enter the project site and transport scaffolding and other materials away to reduce the pressure of debt.

On December 8, 2023, the 23rd Bureau of China Railway issued a "Letter on the Disposal of Building Materials and Project Settlement" to Jiuding Company, saying: "Due to the stacking of materials on site, our department cannot carry out normal construction, and now our department has sent a letter requesting your company to ...... immediately Come to our department to remove the building materials from the site...... At the same time, your company and the authorized client are required to dock the labor subcontracting settlement of the construction project of Henan Jiuding Construction Labor Co., Ltd. in Yuzhou Detention Center within three days after receiving the letter, and complete the settlement as soon as possible. ”

However, the reporter learned that after the letter was issued, the relevant people went to the project department many times, hoping to transport the building materials, but the two sides finally failed to reach an agreement. As for the overall settlement, communication between the two sides has stalled and there is no progress.

According to media reports, the team organized by Yang Yongsheng had entered the construction site long before the relevant agreement was signed. "Therefore, from the point of view of time, several of these contracts should be 'backsigned' or 'resigned'. Media reports said.

"Online signing and online supervision are currently the most advanced regulatory methods in the world, which can avoid this kind of 'backsigning' to cover up violations of laws and regulations to a certain extent. In addition, such a major project involving public interests and state-owned assets should also supervise the payment link online, and we still need to improve greatly in this regard. A person from the housing and construction department told reporters.

"In recent years, the rectification of illegal subcontracting and subcontracting has continued to increase, but there have also been some typical cases of obvious crimes against the wind, the common feature of these cases is that the interests are significant, such as the Yuzhou Detention Center construction project exposed by the media, although the 'half price' is only a paper agreement, but it still reflects this characteristic from the side, so who does this interest belong to?" , such as the quality of the project, the direction of funds.

As of press time, the Yuzhou regulatory authorities did not disclose more details of the "subcontracting incident", and the relevant personnel of the 23rd Bureau of China Railway did not respond to issues such as subcontracting and disputes. However, the local relevant departments said that they would give priority to solving the problem of migrant workers' wages, and that they had organized relevant labor teams to carry out debt accounting and pay part of the arrears half a year ago.

(Editor: Meng Qingwei Proofreader: Yan Jingning)