"It's happening all over," Detective Sergeant John Pinney, head of Victoria's organised motor vehicle theft squad, told The Sunday Age. "These machines disappear into the ether."

Sergeant Pinney said China's booming construction industry had created a surge in demand for heavy machinery and vehicle parts that was fuelling the illicit trade. "It's been going crazy over there for the past few years so it's a prime market for stolen heavy machinery," he said. "It's hard to track these machines and they can be worth half a million dollars, some even up to $2 million. That's the kind of money you're talking about."

A favourite hot spot has been the EastLink road project — which is due to open next year and will connect the Eastern freeway at Donvale to the Frankston freeway on the Mornington Peninsula. Sergeant Pinney said he was convinced machinery stolen from throughout Victoria was being used to build major sporting facilities and infrastructure for the Beijing Olympics.

Construction of the city's 91,000-seat national stadium is expected to be completed by the end of March next year, while the nearby 17,000-seat national swimming centre, known as the "water cube", should be finished by the end of this year. Other building projects have included a 27-kilometre subway line, the athletes' village, a tennis centre, a hockey stadium, a shooting range and a cycling velodrome. A spokesman from the Chinese Embassy in Canberra said he had not heard any reports of stolen machinery being used on Beijing construction sites and he doubted the Victoria Police claims. But Sergeant Pinney said it was all too easy for thieves to steal heavy machinery, such as prime movers, put them in a container and ship them to China.

If a machine was too bulky, it was simply broken down into parts. Many had left the state within a day of being taken.

Sergeant Pinney said customs officers were only able to check a small number of the thousands of containers leaving Australia each year so many that had valuable stolen machinery hidden inside were slipping through the net. A lack of police resources to track down the criminals also made it difficult to crack the smuggling network. The latest figures show that heavy machinery worth more than $5 million was stolen in Victoria last financial year.

The total number of thefts was 144, accounting for just over 28 per cent of the nation-wide total of 504. In some cases, the machines were simply "borrowed". One gang used a 14-tonne prime mover to steal a container of almost 30,000 bottles of Moro olive oil worth more than $200,000 from the Allied Seafreight yard in Brooklyn, in Melbourne's west, last November.

The gang struck again in March, using two stolen prime movers to break into the same yard and steal two more container loads of olive oil worth $470,000. The prime movers were later dumped but the olive oil has never been found. The problem, say police, is that few owners of such machinery keep a record of the vehicle identification number or the engine number. However, businesses have become so worried about the thefts that they are installing GPS tracking devices in their machinery. In July, four men appeared in a Sydney court charged over the alleged theft of $1 million worth of PlayStation consoles from a freight forwarding depot. The operation was thwarted when a GPS device fitted to a prime mover — which was pulling the trailer carrying the consoles — was tracked by satellite to a remote farm.

Peter Butts, a former detective who now heads the company Australian Transport Investigations, said the most popular machinery targeted by thieves shipping goods overseas were bobcats, valued at between $30,000 and $50,000. "What they do is they'll get a container, whack a bobcat in the back and then fill it up with other goods," Mr Butts said.

"They could be going anywhere and everywhere and they're just not traceable. "The problem with bobcats is they all have common keys and very few if any have an immobilising system. "They're not required to be registered and they are all generic in appearance."

Mr Butts said bobcats were prized because they were such multi-functional machines. "You can use them for digging holes, as a grader, as a lawn mower, a front-end loader, a backhoe … plus they run on diesel and they're a four-wheel-drive vehicle."

Mr Butts said well-organised thieves, believed to be outlaw motorcycle gangs, were pocketing millions of dollars from the lucrative stolen heavy machinery trade. Anyone with any information on heavy machinery theft should contact Crime Stoppers on 1800 333000 or visit crimestoppers.com.au. Heavy-duty thefts

■ OCTOBER: Two bobcat skid-steer loaders stolen from Campbellfield sales yard. Value: $250,000+. ■ MAY: Excavator and Toyota tray truck stolen from Hallam yard. Value: $33,000.

■ DECEMBER 2006. Kanga trench digger stolen from Hampton Park building site. Value: $30,000. ■ DECEMBER 2006. Truck and bobcat stolen from Morgan Concrete Developments factory at Hallam. Value: $100,000. ■ AUGUST 2006. Isuzu tipper with bobcat on trailer, a two-tonne twin-cab Daihatsu and a Hino FC truck stolen from a Caulfield North council depot. Value: $300,000+.