(Yicai Global) July 21 -- China State Construction’s shares fell after Shandong province’s transport authority said it will look into claims that a unit of the general contractor cut corners in a high-speed rail project it undertook to save on costs.

China State Construction [SHA: 601668] closed 2 percent lower at CNY5.50 (80 US cents) a share today. The wider Shanghai market finished little changed.

Shandong's transport department said yesterday that it has set up an investigative team following a media report about the under-construction Shandong Laixi-Rongcheng high-speed rail link, which is expected to open this October.

Economic Information Daily reported earlier the same day that a subcontractor on the project alleged that the general contractor, China State Construction Eighth Engineering Bureau, had asked it to cut corners during the building process, which resulted in part of the trackbed failing to meet the design requirements, posing a major safety hazard.

China Construction Eighth Engineering Bureau and its parent company jointly won a CNY3.15 billion (USD440 million) bid for a section of the railroad in October 2020.

The project that links up cities close to Qingdao and Weihai has a total investment of around CNY29.7 billion (USD4.1 billion). Construction work on the 192-kilometer railroad began in November 2020. Once operational, trains on the line will reach speeds of up to 350 km/hour.

Editor: Emmi Laine