Caixin
Mar 22, 2017 06:20 PM
BUSINESS & TECH

Detained Manufacturer Admits to Providing Substandard Subway Materials

(Beijing) -- A cable manufacturer has admitted to providing shoddy materials worth tens of millions of yuan used in a subway line under construction in Xian, the capital of Shaanxi province.

Wang Zhiwei, owner of Shaanxi Aokai Cable Co. Ltd, confessed on camera to using inferior products in an attempt to reduce costs and increase profits, according to a video released Tuesday by the city government's Internet Information Office.

"The batch of cables we provided contains 20 product types with 40 specifications, which cost 40 million yuan ($5.8 million), and products worth about 30 million yuan were substandard," he said.

Wang is among eight executives from Shaanxi Aokai–which was providing the materials after winning a government contract–who have been taken into custody over the inferior cables.

The scandal came to light after a person claiming to be an employee of Shaanxi Aokai posted an article on social media last week accusing the company of cutting corners in cable manufacturing and of falsifying quality control results.

The post, titled “Do You Still Dare Take a Ride on the Xian Subway?”, circulated widely on social media, and claimed that owner Wang was responsible for altering product-quality results, allowing the company to continue to operate as a qualified supplier.

The viral post prompted an investigation by city authorities on March 15, and subsequent tests by the city's quality watchdog determined that the products were substandard.

Lü Jian, Xian's vice mayor, told a news conference Monday night that all five cable samples collected along the No. 3 subway line in Xian failed to meet industry standards, and promised to replace all substandard materials as soon as possible.

Lü stopped short of saying that any irregularities were found with the Xian Metro itself, or with government departments overseeing quality control.

In an apparent attempt to ease public concern over subway safety, Zheng Xiaoquan, a professor at Xian Jiaotong University, told the press conference that the faulty cables were limited to peripheral lines used in the signal control system, and that they could not impact safety.

However, an engineer with the Xiamen metro system—uninvolved with the Xian incident—told Caixin that shoddy cables in signal control systems can compromise safety by disrupting operations. Inferior cables are also more susceptible to fire hazards, a major threat to public safety, as they can result in the release of toxic gases, said the engineer, who asked not to be named.

There are up to 3,000 cable manufacturers in China, but quality oversight at the companies varies greatly, according to industry analysts. The government-overseen contract bidding processes at state-owned companies, including metro operators, are flawed, often favoring the lowest bids with little regard for quality control, some analysts say.

Shaanxi Aokai said its clients included subway operators in Xian, Chengdu and Chongqing.

Chengdu Metro said on Tuesday in a statement via its official Weibo account that it is reexamining all cables supplied by Shaanxi Aokai for possible violations of national standards.

On the same day, Chongqing Metro said in a statement that the company did not use any cable manufactured by Shaanxi Aokai, a claim that could not immediately be verified.

The sale and production of shoddy goods are punishable by up to life in prison under Chinese law.

Contact reporter Li Rongde (rongdeli@caixin.com)

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