A Chinese government crackdown on widespread corruption in the China Three Gorges Corporation, controlling shareholder in Portugal’s formerly state-owned power company EDP, has seen the removal from post of its president Cao Guangjing and colleague Chen Fei.
It is reported in the Chinese press that these two will be ‘assigned other jobs’ although where and when is not yet known.
At the end of 2013 officials from the Communist Party's Organisation Department exposed rampant corruption within China Three Gorges including nepotism, bid rigging, and executive excesses including owning multiple houses, having enormous offices, buying luxury cars and other "violations of discipline."
The company has established a task force to review previous bids and to improve its bidding process.
Guangjing was a key player in China Three Gorges deal to buy in to Portugal’s privatised EDP but denies that his job move is related to the investigations, saying moves like this are usual in China’s state companies.
Shortly after China Three Gorges bought into EDP, Cao Guangjing said he thought the price was cheap, "given the market price for energy at the moment, I think it was cheap" he admitted in a press conference at the end of 2011.
In addition to the current corruption scandal, the Chinese company has been long-criticised for human rights abuses but its investment in Portugal was been welcomed by a cash-strapped government.
Amnesty International commented that the construction of the Three Gorges Dam gave rise to serious pollution of the Yangtze River with the drying up of wetlands, the destruction of fishing communities, land erosion and the emergence of hitherto unknown diseases for the area.
According to Amnesty International Portugal the Three Gorges Dam was built in an unstable geological area and there have been large landslides near the dam, some of them involving the destruction of entire villages.
To enable the construction of the dam, one million Chinese citizens were displaced without fair compensation or any relocation allowances.
Amnesty International fears that in Portugal 'future construction of infrastructure, or the expansion of production of electricity, carried out by the China Three Gorges Corporation may be carried out with the same (poor) standards and lack of respect for the economic and social effects, and for the environmental impact on the population.
These environmental charges and the current dismissal of Three Gorges chairman bring into question the choice of partner when the government sold off the publicly owned shares in Portugal’s then-monopoly electricity supplier.
It remains to be seen if the current enquiry will extend to the conditions surrounding the bid for EDP by China Three Gorges and whether any suspicion will be levelled at Portugal's executive members who agreed the deal at a price that the Chinese found so low that the chairman went on record as saying so.
