Xiangya Hospital Faces Bidding Scandal Over $114M Project

One of China’s most prestigious medical institutions, Xiangya Second Hospital in Changsha, is embroiled in a major bidding controversy over an 827 million yuan (approximately US$114 million) construction project, after the first six ranked bidders were all disqualified and the eighth-ranked candidate unexpectedly won the contract, raising serious questions about transparency and compliance with China’s Bidding Law.

The Controversy

The project in question is the National Emergency Medical Rescue Base at Xiangya Second Hospital, approved by the National Health Commission in January 2024. With a total floor area of 81,470 square meters and funding from central government budgets, provincial funds, and hospital resources, the project represents a significant public investment.

According to an investigative report by The Paper, the bidding process took an extraordinary turn when the first public announcement of candidates on October 30, 2025, listed six qualified bidders — led by Hebei Construction Group, China Railway 11th Bureau Group, and China Construction Science and Industry Corporation. However, a second announcement on December 11, 2025, completely replaced all six candidates with three new ones, including Hunan No.4 Engineering Co., Ltd. — which had been ranked eighth in the initial evaluation.

Legal Violations Alleged

China’s Bidding Law Implementation Regulations (Article 55) stipulate that for state-funded projects, the tendering party must select the first-ranked candidate as the winning bidder. Only under specific circumstances — such as the top candidate withdrawing, force majeure, or failure to submit a performance bond — can subsequent candidates be considered or the bidding process restarted.

“Xiangya Second Hospital’s project — the eighth-ranked winning does not meet any of the conditions [in Article 55],” one bidder company representative told The Paper. “After the results came out, multiple companies filed real-name reports to the authorities, but received no response.”

A first-round bidder candidate added that the tendering party and agency “did not explain in the second announcement the legal reasons, review procedures, or compliance basis for invalidating the original evaluation report,” calling this a “serious violation of the core principles of bidding activities.”

Suspension and Contract Award

On January 14, 2026, the Changsha Public Resource Trading Center suspended the bidding process, citing complaints received, and extended bid validity by 90 days. Multiple participating companies told The Paper they signed agreements to extend the deadline, expecting a fresh bidding round.

Yet on March 17, 2026, instead of a new bidding process, the center published a contract announcement confirming Hunan No.4 Engineering Co. as the winning bidder, with a 913-day contract term. “After filling out the agreement to extend the reply letter, we did not wait for a new tender. Instead, the previous results were used directly, and our complaints received no response at all,” multiple bidders said in a collective statement.

Winner’s Qualifications Questioned

The winning bidder’s qualifications have also come under scrutiny. The Paper reported that during the bidding period, Hunan No.4 Engineering Co. had an active “serious” misconduct record for quality violations at another hospital project — Suining County People’s Hospital — as published on the Hunan Provincial Department of Housing and Urban-Rural Development’s website in June 2025.

Additionally, the winning bidder’s joint venture partner, Jiangsu Hetianxia Energy-Saving Technology Co., an out-of-province company, allegedly failed to complete the required registration to operate in Hunan. A participating bidder representative told The Paper that a search of the Hunan construction market supervision platform found no record of Jiangsu Hetianxia’s registration.

Institutional Deflection

When The Paper sought clarification, each institution deflected responsibility. Xiangya Second Hospital referred inquiries to the Changsha Bidding Center, which directed questions to the Housing and Construction Bureau, which demanded official approval for interviews. The bidding agency, Zhongji Construction Consulting, promised a response but never delivered. None of the authorities contacted provided substantive answers.

As Tencent News and Phoenix News reported, the story has been widely circulated, drawing attention to what critics describe as a pattern of regulatory capture and procedural manipulation.

Broader Context

Xiangya Second Hospital, historically renowned as “Southern Xiangya” — once considered on par with Peking Union Medical College Hospital — has faced a series of damaging scandals in recent years. In October 2024, former associate chief physician Dr. Liu Xiangfeng was sentenced to 17 years in prison for intentional injury, bribery, and embezzlement, severely damaging the institution’s reputation.

What’s Next

Multiple real-name complaints filed by participating bidders remain unanswered by regulatory authorities. The case raises fundamental questions about the integrity of public procurement in China, particularly for large-scale state-funded infrastructure projects. With the contract already awarded and construction underway, it remains unclear whether any regulatory follow-up will occur or whether the concerns raised by participating companies will ever be addressed.