The nation's railway system was hit by a new scandal Monday after a media report revealed that China South Locomotive & Rolling Stock Corporation (CSR) spent too much on train interiors, exposing loopholes in railway procurement.

A procurement list of CRH2 bullet trains obtained by the New Century Weekly magazine showed CSR had spent some 400,000 yuan ($63,507) on a single type of toilet installed in the trains.

Further down the list are tissue boxes costing 1,125 yuan per item, automatic washbasins purchased at a unit price of 72,000 yuan and VIP chairs used in CRH380 high-speed trains priced at 160,000 yuan each.

A tissue box usually costs around 20 yuan in supermarkets in Beijing. The magazine did not reveal when the procurements were made.

The disclosure dealt another blow to the railway system's image, already damaged by a deadly bullet train crash in July last year and a series of corruption cases within the Ministry of Railways (MOR).

Many Internet users said they were shocked by the lavish spending. Some said they finally figured out why ticket prices for bullet trains were so high.

The ticket price for a second-class seat on CRH380 high-speed trains is 550 yuan, about 70 percent higher than a seat on regular trains.

By press time, the CSR had not commented on the report. 

Wang Mengshu, a deputy chief engineer at the China Railway Tunnel Group, told the Global Times Monday that the MOR monitors closely procurement related to train safety, but sometimes neglects purchases of other equipment.

Zhu Lijia, a professor at the Chinese Academy of Governance, told the Global Times that the exposed item list, if true, reflects procurement loopholes in the railway system.

"In many cases, connections with MOR officials or relevant departments ensure a bid is successful. If a company does not have a strong 'background' with relevant parties, it has little chance of getting the bid regardless of product quality and price," Zhu said.

According to Caixin magazine, providers for bullet train components began to bloom in 2005 in cities like Beijing, Qingdao, Wuxi, Changzhou and Shanghai.

These companies actually had no related qualifications but monopolized the supply chain by virtue of their solid connections with the MOR's high-ranking officials.

Former MOR head Liu Zhijun was removed from his post last year and is still under investigation. He was suspected of receiving commissions from providers during the equipment bidding and procurement process.

According to an investigation report into the bullet train crash by the State Council released on December 28, Liu "bore the main responsibility for the accident."

"The new scandal was more than a crush to railway services, but a further blow to the MOR's credibility since the public are angered by the abuse of taxpayers' money," Zhu said.

The MOR has since stepped up reform of its bidding system.

The ministry released a notice late last year requiring all railway projects to undergo bidding evaluation in a project transaction center under the Beijing Municipal Commission of Housing and Urban-Rural Development.

Regulations released last September also stipulated that no railway-related construction was allowed to start before the bidding was concluded, aiming to further regulate the bidding that had been accused of lacking transparency.

Zhu applauded the measure, which introduces a third party into bids, saying that it could ensure better transparency.

Liu Hui, president of the University of International Relations, said during a seminar regarding government procurement last year that to standardize the procurement process, the enforcement of related laws was also essential.

China has slowed down the construction pace of new railways nationwide.

Railway Minister Sheng Guangzu said in December that a total of 400 billion yuan will be invested in basic railway construction this year, down from the more than 700 billion yuan spent in 2010.

Sheng admitted that there were problems in previous construction referring to impractical scope, standard and construction periods.

Liu Linlin and agencies contributed to this story