Summary：China's National Audit Office (NAO) issued its report on the Beijing-Shanghai high-speed railway Monday, showing the project continued to be in arrears of 8.3-billion-yuan (US$1.3-billion), Chinanews.com reports.

China's National Audit Office (NAO) issued its report on the Beijing-Shanghai high-speed railway Monday, showing the project continued to be in arrears of 8.3-billion-yuan (US$1.3-billion), Chinanews.com reports.

Based on an audit conducted between June and September 2011, the report reveals irregularities in the tender invitation, mismanagement of certain projects, misappropriation of a 491-million-yuan (US$77.7-million) compensation fund for land requisitions, and debts in arrears of 8.3 billion yuan, 5.9 billion to material suppliers and 2.4 billion to construction labors.

Xu Aisheng, Director of the NAO's Department of Fixed Asset Investment Audit, said the audit spanned the high-speed railway's entire three-year construction period and required more than 100 auditors each year to monitor the project.

The rapid construction of high-speed railways in China in the past few years has generated enormous debt. The Ministry of Railways' debt reached 2.29 trillion yuan in September 2011 and the debt ratio hit 59.6%. Because of public concern about the safety and financial fluidity of high-speed railway projects, the ministry reduced its investment in rail construction projects in 2011 to 400 billion yuan from 700 billion yuan.

Construction of the 1,318-kilometer Beijing-Shanghai high-speed railway was completed in November 2010, and cost about 220.9 billion yuan (US$35 billion), the largest investment in the country's railways history. With speeds of 250 or 300 kilometers per hour, the line shortens the journey between Beijing and Shanghai from 11 hours to five or six hours.