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[Ferro-alloys.com]Around 6.7 billion yuan ($1.1 billion) was misappropriated in building and operating China's key trans-regional power transmission project, the country's top auditing office revealed on Monday.

The results were based on audits conducted between April and July 2013 on the investment, construction and financial management of 21 projects that are part of the west-to-east power transmission program, the National Audit Office (NAO) said in a report.

The office found companies winning construction contracts without required bidding or other irregularities in the tendering and bidding process that involved 3.44 billion yuan, accounting for 16 percent of total funds audited.

Similar foul play in bidding was found in equipment, material procurement and activities involving bidding agencies, accounting for about 819 million yuan of illegal gains.

The NAO also noted that some grid companies made too many rough estimates for project investment, resulting in unnecessary expenses that added up to 1.04 billion yuan of over-stated investment.

Some also created fraudulent contracts or receipts, and swindled 1.38 billion yuan in project construction funds from their superior power companies.

The NAO said it has passed relevant leads to legal departments and regulators. Audit results were also presented to the State Grid Corporation and China Southern Power Grid, two State-owned firms in charge of the power transmission project.

The west-to-east electricity transmission program was initiated in 1993 and designed to transmit power from China's western hinterland to power-hungry eastern areas. By June 2013, 43 of 48 approved projects were completed and put into use, with 179 billion yuan being invested.

• [Editor:Mike.zhang]