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China’s Tallest Tower Builder Assures Quality Amid Sand Scandal

Photographer: Nelson Ching/Bloomberg

A woman walks past the construction site of the Ping An International Finance Center in Shenzhen on Sept. 28, 2010. China State Construction Engineering is the contracted builder of Ping An Finance Center, while the real estate arm of Ping An Insurance (Group) Co., China’s second-biggest insurer, develops the center. Close

A woman walks past the construction site of the Ping An International Finance Center in... Read More

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Photographer: Nelson Ching/Bloomberg

A woman walks past the construction site of the Ping An International Finance Center in Shenzhen on Sept. 28, 2010. China State Construction Engineering is the contracted builder of Ping An Finance Center, while the real estate arm of Ping An Insurance (Group) Co., China’s second-biggest insurer, develops the center.

China State Construction Engineering Corp. (601668), which is building the country’s tallest tower, said materials used in all its projects meet quality standard as the southern city of Shenzhen conducted inspections on builders.

Samples from buildings, including the 660-meter Ping An Finance Center due to be completed in 2015, were tested, according to Shenzhen’s Housing and Construction Bureau. The industrywide inspection in the city last week followed a China Central Television newscast on March 14 that investigated the use of substandard concrete by some developers in Shenzhen that used low-quality sea sand instead of river sand.

“I’m not quite familiar with the incident of the Ping An Finance Center, but we put quality and safety as priority in all our projects in 40 cities, including Shenzhen,” Kong Qingping, vice president of the company, said at a press conference in Hong Kong yesterday after the earnings of China Overseas Land & Investment Co. of which he is chairman. “I’m glad to say, so far, we haven’t found such incidents.”

The Shenzhen government found 31 companies violated industry rules and ordered eight of them to suspend business for one year in the city for using substandard sea sand to make concrete, according to a notice posted on the bureau’s website on March 16.

“Sea sand contains salt and chloride, which will corrode steel used in concrete,” Han Jixian, Beijing-based secretary general of China Aggregates Association, which represents the nation’s sand production and excavation companies, said in a phone interview today. “This is the major problem of using sea sand as raw material for concrete.”

Cheaper Option

Even as China bans such practices in concrete production, ocean sand is still being used because of price differences and supply shortage of river sand, Han said. Prices of sea sand are about half those of sand from rivers or lakes, he said.

China State Construction Engineering is the contracted builder of Ping An Finance Center, while the real estate arm of Ping An Insurance (Group) Co. (2318), China’s second-biggest insurer, develops the center.

Ping An banned the builder from using sea sand in the construction of the center when they signed the contract, it said in an-emailed statement today. The company will order the builder to double check the source of the concrete and it will cooperate with the Shenzhen government’s investigation, it said.

The tower will be China’s tallest building when it is completed, according to the skyscraper center database of the Council on Tall Buildings and Urban Habitat. China’s tallest building currently is the 492-meter Shanghai World Financial Center.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net; Jasmine Wang in Hong Kong at jwang513@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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