The National Audit Office (NAO) published a deeply critical report on the under-construction Xiluodu Hydropower Station, China's second-largest dam project, on July 20.

The report charges the project's developer with a lack of oversight, overspending and poor allocation of funds.

Xiluodu Hydropower Station is being developed by the China Three Gorges Project Development Corporation (CTGPDC).

Statistics revealed by NAO show, that from 2003 to 2008, the project was1.097 billion yuan over budget.

Due to a tightening of the timetable, the construction of the dam was much more dangerous than it needed to be and several accidents took place.

Furthermore, of all the 464 projects involved with the construction of the dam, 219 were not lawfully handled through public bidding.

Three Gorges International and Three Gorges Development Company, two affiliated enterprises of CTGPDC, were also singled out for criticism in the report.

The former charged CTGPDC 25.71 million yuan to act as the Xiluodu project's tendering agent. Such a price was within the budget set aside by CTGPDC, but was also10 million yuan higher than the national standard.

The report also revealed that there were delays in the relocation of migrants who once lived in Xiluodu area.

The suggested measures outlined in the report include, completeing the budget as soon as possible, improving project management and reducing the amount of unreasonable spending.

Xiluodu is located on the upper reaches of the Yangtze River on the border of Yunnan and Sichuan provinces.

Construction of the controversial project began in 2003 and the hydropower station is expected to become operational by 2013.