Vietnam’s citing of figures showing the efficient use of Official Development Assistance (ODA) have been overshadowed by news about embezzlement of funds in highway projects.


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Posco's former President Chung Joon-yang

Japan International Cooperation Agency (JICA), for example, told Vietnam that Japan would stop providing ODA to Vietnam if other bribery cases are discovered, following news about a highway bribery case.

It asked Vietnam to pay back the disbursed money for a technical consultancy package, a part of the Yen Vien – Ngoc Hoi project in Hanoi, because of wrongdoings in implementation.

Two “highway scandals” were discovered related to  Japanese-funded infrastructure projects, including the East-West highway in HCM City and the elevated highway project in Hanoi.

The first scandal was discovered in 2008, in which Huynh Ngoc Sy, the head of the project management unit received 20-years in prison for receiving a bribe.

The second was discovered in 2014, when JTC Group gave bribes to Vietnam Railway Corporation’s officials.

Deputy Minister of Transport Nguyen Hong Truong at a press conference on April 3 said that Vietnam will pay back the money as per international practice.

Meanwhile, the South Korean steel giant Posco has been suspected of setting up a slush fund for highway projects in Vietnam from 2009 to 2012.

Korea Times reported Posco’s managers have been accused of running a slush fund worth 10 billion won, or approximately VND200 billion, for the transport projects.

The managers were found colluding with local sub-contractors to exaggerate the estimates for highway projects in Vietnam.

However, Truong said the payment made between the main contractor and subcontractors is the right of contractors. VEC and the Ministry of Transport did not intervene in this issue.

Meanwhile, according to Korea’s Joongang Daily, the slush fund was worth 10.7 billion wons, or VND213 billion.

Posco, together with Keangnam and Doosan, has been named by the Ministry of Transport as the worst international contractor. In general, the Korean corporation, though winning bids to execute large-scaled projects, cannot show that it has more outstanding capability than that of domestic contractors.

Posco was found to have caused problems with some construction works, including projects HCM City – Long Thanh – Dau Giay in the south and Noi Bai – Lao Cai in the north.
 
In December 2013, Cho Yang Cook of Posco E&C and several Vietnamese were disciplined because they did not respect the design of a portion of the Ruot Ngua Bridge.

Minister of Transport Dinh La Thang noted at a meeting that the South Korean contractors bid low prices to obtain the contracts.

Mai Anh Tuan, VEC’s General Director, the investor of the projects, noted that with such low prices, the contractors had to hire unqualified subcontractors.

Phuoc Ha