Chinese regulators have fined State-owned companies and disciplined dozens of executives after establishing that construction shortcuts were taken at a major pumped-storage hydropower project in southeastern China, raising concerns about safety and oversight in large-scale infrastructure development.

The Fujian Energy Regulatory Office of the National Energy Administration said on Wednesday that an investigation found last year's media reports on substandard construction at the Yong'an pumpedstorage power station in Fujian province to be "basically true".

The violations involved slope support works at the project's lower reservoir, including insufficient steel reinforcement lengths and incomplete grouting, according to an official statement released by the office.

The regulators imposed administrative penalties totaling over 20 million yuan ($2.8 million). Sinohydro Bureau 3 Co, the construction contractor for the lower reservoir project and a subsidiary of State-owned Power Construction Corporation of China (PowerChina), was fined 18.73 million yuan. Smaller fines were issued to the project owner, Fujian Mintou Yong'an Pumped Storage Co, and to the supervision firm, Zhejiang Huadong Engineering Consulting Co.

The subpar work was first exposed by media reports in late November, prompting scrutiny of construction quality at major infrastructure projects. PowerChina acknowledged the allegations at the time and said it had launched an internal investigation.

According to the regulators' findings, Sinohydro Bureau 3 altered construction techniques without approval from designers, failed to meet design standards for key components such as anchor piles and bolts, and allowed critical procedures to proceed without full-time quality inspectors on site. Regulators also found illegal subcontracting practices.

The supervision firm was cited for failing to properly carry out its monitoring duties, including not providing continuous on-site oversight during key construction stages. The project owner was faulted for lax on-site management.

Authorities said the main dam of the lower reservoir — a concrete-faced rockfill dam — is yet to be built. However, defects in the slope support system could weaken stabilization and under extreme conditions, lead to localized collapses.

In addition to financial penalties, dozens of executives and managers were punished. PowerChina removed or demoted multiple senior project leaders and executives, while disciplinary sanctions were also imposed on employees at the supervision firm and the project owner. Regulators confirmed that some supervision personnel had accepted banquets and paid entertainment from construction companies, and those involved were dismissed.

The Yong'an pumped-storage power station, located in Yong'an city, has a planned installed capacity of 1.2 gigawatts and a total investment of nearly 75 billion yuan. Pumped-storage plants are considered critical infrastructure in China's push to stabilize power grids and support renewable energy expansion.

In response to the case, Power-China has ordered all its subsidiaries involved in the pumped-storage power station construction to halt work for inspections. Fujian has launched a province-wide review of similar projects, while the National Energy Administration said it is organizing a nationwide safety and quality campaign targeting pumped-storage hydropower construction.

Regulators require the construction companies of the Yong'an pumped-storage power station to strictly follow engineering quality management regulations, ensuring all issues are fully resolved and the project's quality and safety are guaranteed.