Hunan province has been home to a surge of hydroelectric projects over the past decade, with already over 4100 small hydroelectric power plants build within its borders. This “great leap forward” of dam projects in Hunan has been spurred by officials who are also shareholders in the relevant companies.
According to an official at the water resources department of Hunan province, the phenomenon of government officials being economically invested in companies which they also regulate is common all over the province. According to the official investigated, this is a double-edged sword. In the short-term, as projects are passed quickly, it helps to lower the electricity shortage faced by people in rural areas and also helps increase local GDP. However, it also means that the political approval process (e.g. through environmental impact assessments) is ineffective and exists in name only. Recently, so many rural people have been dissatisfied about the projects that government officials meant to handle complaints are overwhelmed.
While this practice was officially banned in April 2010, government officials continue to hold shares in the hydropower industry. This practice has caused a serious loss of government credibility in the public eye.
