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How much can SOEs spend on renovation?

China Daily | Updated: 2009-07-21 07:55

The government must stop State-owned enterprises from squandering public money, says an article in Dahe Daily, referring to Sinopec paying an astronomical amount for a chandelier. Excerpt:

Sinopec did not pay 12 million yuan for a chandelier; it paid only 1.56 million yuan, said a Sinopec spokesman trying to soothe ruffled public feathers over its exorbitant spending on renovation. Does that make matters any different?

In the beginning, many people did not believe a chandelier could cost more than 10 million yuan. And they still do not believe one can cost more than 1 million yuan.

Ordinary workers earn only about 1,000 yuan a month, which means the money could have paid the monthly salary of 1,560 people.

The current cost of sponsoring a dropout to complete primary school education in remote areas is about 1,000 yuan, too. That means the cost of the chandelier could have paid for 1,560 children's primary education.

By all accounts, 1.56 million yuan is an unthinkable amount for most Chinese. Some netizens have said they can't earn 1.56 million yuan even during their entire lifetime.

We should also notice that 1.56 million yuan for a chandelier and 240 million yuan for building renovation passed Sinopec's "strict" appraisal system, as claimed by the Sinopec spokesman.

When the renovation project is completed, Sinopec said, office expenditures will be cut and efficiency enhanced. So in the eyes of Sinopec, the money used to buy the chandelier is a thrifty purchase and its renovation a thrifty project.

We are curious to know how much Sinopec would have spent to buy a chandelier and renovate its building if the appraisal system was not "strict".

As early as 1988, the State Council issued a directive curbing office construction projects. In 2007, Premier Wen Jiabao said we must not build on office buildings unnecessarily. After the Sichuan earthquake last year, the central government reiterated the importance of thriftiness and banned squandering of public money. So how could Sinopec still continue to spend 1.56 million yuan on a chandelier and 240 million yuan on renovation?

(China Daily 07/21/2009 page9)

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