The Story of Luoxi Bridge
(Zhaoshilong's Blog) October 29, 2006.
There is a bridge in front of my home. I have to go past it every day. When it is time to quit work, I have to leave a little bit early because otherwise I will have to leave after the evening rush hour. That is because the traffic volume on this bridge is far too high. This may be the bridge with the highest traffic volume in all of China. At rush hour, it is tightly packed with cars ...
The bridge is known as the Luoxi bridge. It may be the most famous bridge in China.
The bridge is famous first because it is the bridge with the highest traffic volume in all of China. The bridge is also famous as the greatest negative example of toll bridges. Finally, the bridge is famous because too many negative news have been reported by the media and yet the bridge stands imperturbably because the sense of shamelessness of the people in charge of the bridge is as good as their crisis management skills.
People who live in the white-collar satellite town of Luoxi New City in Guangzhou are cursing. After they finish cursing the government, they curse the capitalists. They curse the "crooked businessman" Henry Fok who hailed from Panyu and ripped off his hometown people by claiming to donate money even as he profited. They also curse the toll booths which served as the money-growing tree for the Panyu government, which has made enough money to build another dozen bridges and still continues to rack in more money. If it were possible, the government will probably keep collecting until the end of time.
They kept cursing until Henry Fok decided that he could not pretend that he was deaf and dumb anymore. He made a special trip to Guangzhou and he stayed at the famous White Swan Hotel which was still underneath his name at the time. He called Mr. Meiyin, who was still alive and chief editor of Yangcheng Wanbao at the time, and offered information that he wanted to be placed in the public record. From there, a huge scandal was exposed. For more than a decade, Henry Fok had been blamed for what happened.
Even though Henry Fok was a vice-chairman of the National Political Consultative Committee, he had been unfairly maligned. Later on, we found out about how he was unfairly oppressed by corrupt officials such as Panyu secretary Liang Bainan (who was sentenced to 12 years in jail at the end of 2004). A short while ago, Ho Mingsi (a consultant at the Henry Fok Foundation) wrote a long essay to detail how Henry Fok was extorted and exploited by the 'local thug' Panyu City Secretary Liang Bainan in his Nansha investment between 1993 and 2003. For example, in his final years, Henry Fok wanted to invest in his home village of Nansha Harbor. Among the various projects, he wanted to build a pier for a fast ferry to Hong Kong. Liang Bainan refused to sign off unless Henry Fok built him a personal pier in the same harbor. In the end, Henry Fok saw that building the ferry pier would be convenient for the folks in Panyu and there was also good prospects for making money, and so he satisfied the corrupt official's desire.
So Henry Fok revealed his tussle with Liang Bainan who make it impossible for him to invest in his hometown unless he coughed money up. In the end, he could not bear it anymore and he came out publicly to unleash his anger! Public opinion was in an uproar: the famous National Political Consultative Committee vice-chairman Henry Fok was suffering these kind of indignities in his hometown! Some commentators remarked in sorrow: if even Henry Fok got mistreated, then the local officials fear nobody!
Yangcheng Wanbao sent its current affairs reporter Hong Qiwang to interview Henry Fok and he wrote the front page story that rocked the Pearl River Harbor, Hong Kong and Macau. At the time, Henry Fok made several declarations to the effect that he had been unfairly blamed on certain things over the years and that he was not going to take it anymore. He said that the Luoxi bridge was funded with donations from him and the Ho brothers for their hometown. Henry Fok recalled that he collected 14.4 million RMB from various people for this hometown bridge. He then used the money to purchase a large number of trucks in Hong Kong and imported them into China and they were sold to raise more than 70 million RMB. This sum of money was then used to construct the Luoxi bridge (at the entrance to Luoxi bridge, there is a plaque which recorded the history and this plaque is still there today). Henry Fok has never ever collected a cent. He had never planned and never will collect a cent from the bridge. As to why a donated bridge collects toll and where all the toll receipts went, that would have to be answered by the Panyu local government.
When this report hit the streets, Guangzhou was rocked. All the other Guangzhou media followed up immediately and the Luoxi bridge became famous, overwhelming the Wuhan Changjiang Number One Bridge which had just been covered by the CCTV Focused News program for using toll fees to repay construction debt.
Luoxi Bridge was completed in August 1988 with a total investment of 81 million RMB. Based upon the projected traffic volume, it would take about 10 years to recoup the investment. But ten years later today, the traffic volume has been much higher than originally estimates and the citizens are annoyed: what hasn't the debt been repaid already?
Under pressure, the Panyu government said: the money for constructing the bridge has been more or less repaid, but there are eight more related projects in the package that have to be repaid. These so-called projects are the various road and bridge construction projects that depend on this golden-egg-laying Luoxi bridge to pay for. It does not matter whether the people who pass over Luoxi Bridge do not get to enjoy those "unrelated" projects -- several hundred thousand people live in Luoxi New City go back and forth daily to Guangzhou over this bridge, but they are forced to pay for the other construction projects of the Panyu government. People began to wonder if the bundling was irrational and illegal. So the Panyu government immediately made a delayed application to the Guangdong provincial government, and the provincial finance and transportation departments immediately responded with "Agreed in principle!" These people are so good at plugging up the holes!
In April 1999, the Guangdong province cost estimate investigative team determined that the income from the bridge should have been enough to pay the principal and interest for the loan to build the bridge by the end of 1993. By the end of 1998, the bridge should have generated business revenues of 716 million RMB. This exceeded the original investment on the bridge, but it also covered the eight other projects that were forced upon the citizens.
But what people did not know was that the Panyu government wanted to apply for the toll period for six bridges (including the Luoxi Bridge) to be extended to year 2028. Under repeated questioning by People's Congress Representatives Wang Zechu and You Haiyan on behalf of the people, the Panyu government could not shoulder the pressure. In 2001, after collecting 13 years of toll to "repay the debt," the Panyu government said: "The Luoxi Bridge was originally planned to be a toll bridge for twenty-eight years. Based upon the strong reactions from the people, we have decided to reduce the time period by 7 years and collect toll only for 21 years." When this news came out, the public was in an uproar. Even Henry Fok who had been cursed for so many years had to come out and tell the truth.
Finally, provincial governor Lu Ruihua said unofficially at a meeting: "Since the public reaction on Luoxi Bridge is so strong, they should not be collecting toll anymore." At the time, a Yangcheng Wanbao reporter was there and overheard this. He immediately reported it. But the blowback was swift and powerful, as an utterance during an informal discussion should not have been reported. So the media only carried that story for one day.
In 2004, the newspapers published heated debates on the removal of toll fees for Luoxi bridge. Immediately, the government departments that did not want to lose this cash cow came out to say: "Luoxi Bridge will become congested without the toll." Guangzhou Daily also came out in support to say that the principal reason to collect toll was to relieve congestion. They could not imagine that traffic may become less congested without the toll. The major reason for the congestion before was that the toll collection process took time. My friend Tong Huaqing said angrily: "Guangzhou Daily has no moral quality! I'll never read it again!"
On July 1, 2005, Luoxi Bridge finally discontinued toll collection. An audit also began. The Guangdong provincial Audit Department began auditing the toll operations with respect to the loan situation up until June 30, 2005. Based upon the latest auditing results, the cumulative revenue was 1.458321 billion RMB after 17 years of operation. The cumulative expenditure was 695.2859 million RMB. The cumulative debt amount was 760.3206 million RMB and the available amount for debt service was 763.2462 million RMB. If the principal was completely repaid, there will be 2.9256 million RMB left.
The audit results showed that of the gross revenue of 1.4585321 billion RMB, toll fees accounted for 1.438286 billion RMB, interest accounted for 9.243 million RMB, miscellaneous incomes for 69,900 RMB and tax refunds for 19.2519 million RMB. Of the gross expenditures, the management fee was 103.6353 million RMB (or 7.2% of the gross toll receipts); the cumulative engineering expenditure was 45.9064 million RMB, including all the repairs and maintenance of the bridge and the road. The cumulative water works fund was 11.0221 million RMB, and has been returned directly to the Finance Department. The various kinds of paid taxes amounted to 37.4766 million RMB. The audit also determined the amount of interest paid to the banks was 497.2455 million RMB.
Supposedly, there was a loan of 700 million RMB for constructing the bridge. Did it really cost that much to build a bridge in the 1980's? Did this loan require 500 million RMB in interest payments? Why was the management fee 7.2%, higher than the 5% in the regulations? Will the more than 70 other toll stations in Guangzhou province be audited in the same manner? Henry Fok put in 14.4 million RMB (that is the amount that the Panyu district government acknowledged) to build the bridge but why did the cost go up to 700 million RMB by the time it began? The accounting books showed that the bridge construction headquarters received 11 million RMB from Henry Fok and others. What happened to the rest of the money? After collecting toll for 17 years, how much was taken in? What were the expenses? Is there any money left after deducting loan principal and interest repayment?
Henry Fok claimed that HK$14 million was donated and used to purchase 300 trucks which sold in mainland China to raise 70 million RMB. The Panyu leader said that when the 300 trucks went through customs in 1983, the assessed value was 17 million RMB. Therefore, Panyu told the world that Henry Fok and others donated 17 million RMB. But two years later when the trucks were all sold, the actual income was only 14.855 million RMB.
Several years ago, CCTV conducted a special feature story about this matter. The Panyu Finance Department went through the old file cabinets to find all the original documents. The results showed that the 300 trucks were sold for an average of less than 50,000 RMB each. These trucks were sold by the Panyu Materials Department and the sales receipts were turned over to the Finance Department, which allocated the money to the Luoxi Bridge construction headquarters.
But the provincial people's congress representatives asked next: if this money was stated as donations within the Luoxi Bridge construction fund, then why did the provincial Audit Department listed it as capital raised by the Panyu government that requires repayment of principal and interest? Why wasn't this money classified separately? Is this the reason why Luoxi Bridge became a toll bridge?
The Panyu district leader explained that the provincial government issued regulations with respect to donations to construct bridges in November 1988, but the Luoxi Bridge began construction in 1983 when there was no clear regulation by the provincial government. That was why Panyu classified the donations from Henry Fok and others as part of the capital raised by Panyu.
Oh, so that was how it was! But Henry Fok had to endure many years of curses! When didn't the local government say a word on his behalf, or even release a fart?
People are still wondering: Was the income after 17 years only just 1.45 billion RMB? The rumor was that the Luoxi Bridge was the "combined gold mine" of many government departments and this has never been dispelled. There has always been a debate over the traffic volume on Luoxi Bridge. The local government department said that the daily bridge traffic was between 15,000 and 20,000-30,000 cars. But some newspaper reporters and experts refused to believe the figure and they stationed themselves at the bridge entrance and counted themselves. They estimated that the vehicular traffic is at least 100,000 per day, and as high as 150,000. So where the hidden huge income go? Is this going to another unaccountable account?
CCTV has been here many times before, but none of their reports were ever aired. The word on the street is that Panyu is really good at public relations crisis management.
Sigh, how many stories can come from a bridge? Alas, this is going to end when it becomes a free bridge. Henry Fok passed away in the early morning of October 29, 2006. An overseas Chinese leader and an important witness of this public case has now departed. But will the secrets of Luoxi Bridge be buried at the bottom of a chest forever?