A new stretch of road in the northwestern Chinese town of Da’an has turned into a tug-of-war between the contractor that built it and the local government, which has yet to issue the full payment.
Almost two years after the project’s completion, construction company Shaanxi Yuanjing Engineering Co. Ltd. has accused the township government of withholding more than 800,000 yuan ($121,000), Chinese Business View reported Thursday.
Gao Zhengbao, the Party secretary of Da’an — a town in Shaanxi province — confirmed to the newspaper Wednesday that his office hasn’t issued the remaining payment, explaining that the contract was signed by his predecessor. “We don’t have the money right now,” Gao was quoted as saying. “Please go to the person who signed it.”
As a result of the standoff, the company said, some 30 workers have been waiting for their wages since last December.
In China, defaulting on wages is a criminal offense punishable by fines and even prison sentences. It’s also a common problem. Last year, the government paid 35 billion yuan in arrears from state coffers to some 3.7 million migrant workers, most of whom worked in construction.
On Tuesday, China’s cabinet said the ability of local governments to ensure wage payments for migrant workers will be included in their annual performance evaluations. Earlier this month, the Ministry of Human Resources and Social Security also released an urgent notice to local administrative bodies, asking them to clear all outstanding debts for government projects by year’s end.
Qin Xiyan, a Changsha-based lawyer specializing in protecting migrant workers’ rights, told Sixth Tone that local governments can be held accountable and sued for not paying the due amount to individuals and companies — a crime that can lead to a maximum of seven years in prison for the person in charge of the department. He added that the government is legally responsible for paying any outstanding amount, regardless of leadership changes.
“It’s the government instead of the individual leaders who signed the contract,” Qin said.
Gao Wen, the engineering company’s project manager, told Chinese Business View that the township government still owes them 10 percent of the amount stated in the contract, which was supposed to be paid in full last year. By December 2016, the company had only received 2.3 million yuan, he said. Records from the auditing department of Ningqiang County, which oversees Da’an, show the contract for the road project was worth just over 3.1 million yuan.
Gao Wen has accused the township government of breaching the contract, and he said the company would take legal action if the problem were not resolved. However, Gao Zhengbao, the Party secretary, told Chinese Business View that his office would make good on its promise in due time. “There are projects [in Da’an] whose payments have been delayed for seven or eight years,” he said. “People knew the town was out of money before signing the contract, but they were still willing to work.”
In July, amid amassing debts countrywide, the Ministry of Finance introduced a program allowing local governments to issue special bonds for the construction of toll roads. By the end of 2016, the total amount of government debt in China stood at 15.32 trillion yuan, accounting for 36.7 percent of the country’s gross domestic product, according to the ministry.
Additional reporting: Fan Liya; editor: Kevin Schoenmakers.
(Header image: A construction worker uses a jackhammer while building a road in Zunyi, Guizhou province, Dec. 9, 2017. Luo Xinghan/VCG)