THE out-of-date cinema on Sichuan Zhonglu has not been so busy in years. But on this occasion, it was not a movie that drew the huge crowd, but a public car auction.

The city held its first public auction of automobiles owned by government departments and enterprises on April 24.

"I didn't come to bid, I just wanted to see what was going on with the auction of the leaders' cars," said an old man living nearby.

Previously, only staff of State-owned enterprises were allowed to attend auctions of government- or enterprise-owned autos. Enterprises often sold cars to the original users at preferential prices.

The 33 "leaders' cars" were sold by Shanghai Auction Co Ltd in about two hours. All of them came from an unnamed State-owned enterprise (SOE).

Government departments, institutions and State-owned enterprises historically have bought automobiles for leaders according to their levels. Although they have always been intended for official use only, these vehicles have sometimes been used for private business. The government is taking steps to eliminate abuse of government-owned vehicles to reduce the cost to the public.

Of the 900 people who attended, 408 registered for the auction.

All minimum bidding prices for the 33 cars - with plates - came to a total of 2.5 million yuan (US$302,297), but the final sale totalled 3.66 million yuan (US$442,000).

"The prices have been a little higher than we expected and the number of people attending the auction was also bigger than anticipated," said Lin Yiping, general manager of the Shanghai Auction Co Ltd.

The first car on the block was a Santana 2000 with a minimum price of 50,000 yuan (US$6,046). After about 3 minutes of bidding, it sold for 114,000 yuan (US$13,768).

The group of cars auctioned included Santana, Audi, Buick, Opel, Dodge and Jeep Cherokee. The most expensive car was a Buick bought in September 2003, which was valued at an estimated 200,000 yuan (US$24,200). It sold for 224,000 yuan.

"I think the higher price is partly because we have very few public cars being auctioned," Lin said.

"My expectation is to buy a Santana at about 60,000 yuan (US$7,255)," said Zhu Wenliang who bought the No.33 car for 76,000 yuan (US$9,178). "It is a little more expensive, but I think a public car is better in quality."

He said it was the first time he had attended a car auction and he thinks cars from the "State" are more dependable.

"Buying a public car is rather economical because most public cars are driven less than private cars or taxis," said a Qiangsheng taxi driver who used to work for a cosmetics company. "Secondly, maintenance on these cars has been better."

"When I worked for that company, I only worked about five hours every day. In the afternoon, I just drove back home and had a nap. It was so comfortable," he added.

Steps ahead

"As a step on the path of SOE reform in the use of public cars, the enterprise sold the cars, with the original users of these cars being paid a transportation subsidy instead," said Lin Yiping.

A man who said he was from the SOE confirmed the existence of the new subsidy."I heard they receive from 2,800 to 3,400 yuan (US$339 to 411) each month according to their levels," said the man who was unwilling to give his name. The taxi price per kilometre in Shanghai is 2 yuan (US$0.24).

"No matter how much compensation they got, making the auction open to the public, at least, is much better than the auction being held among insiders of government and SOEs. It is a very important sign of progress," said Yu Hai, professor in the sociology department of Fudan University.

Publicly owned cars often were sold at a very low price, making them a kind of "State-owned capital" flowing into individuals' pockets, according to the professor.

"But I am not sure if this sort of auction is a show designed to tell everyone that 'we are reforming'," he said. "If the SOE has 100 cars and only sold a few, does it really save anything?"

The professor said that only when most officials are denied cars can the reform be said to be successful. "The only sure way is to cancel the practice of using publicly owned car," he said.

It is reported that at the end of 2003, Shanghai owned about 500,000 cars for use by government departments, institutes and SOEs. In 2004, the Minhang District initiated a trial reform of public auto use, but a plan for the city hasn't yet been created.

Government spokeswoman Jiao Yang said at a press conference last August that the city had started controlling the purchase of cars.

The Shanghai-based National Business Daily also reported that the purchase of public cars had decreased noticeably since last August.

Sign of power

A survey launched by the Social Survey Institute of China said about 70 per cent of people thought the abuse of public cars for personal affairs was common; 60 per cent said the cost of maintaining public cars and drivers was very high. The survey was carried out in seven big cities, including Beijing, Shanghai and Guangzhou.

A proposal from the first session of the 10th National Committee of the Chinese People's Political Consultative Conference held in 2003 said that the cost of driving 10,000 kilometres in a privately owned car is 8,215 yuan (US$993), but the cost for a publicly owned car is tens of thousands of yuan, at least.

"Publicly owned cars are a very big financial black hole in the country, producing waste and corruption," Professor Yu said. It is said that public cars are used for official purposes only one-third of the time, with improper usage accounting for the rest .

"There are too many publicly owned cars, I don't think all institutes or companies need them," Yu said. Though the State regulations specify that only officials above certain levels can use cars, in some high-profit enterprises, even ordinary staff have cars.

"Last but not least, the public car is more like a symbol of special power than a piece of transportation equipment," the professor said.

"The reform of public car use not only benefits many people, but also changes the deeply rooted concept of official power. I think it will require a rather long time to effect the reform."

The expert suggested that detailed regulations addressing the scope of public car use is needed. He said that government departments and SOEs, except some special departments such as the police, should own fewer cars, and that cars could be rented when needed.