Foreign Aid

Zero tolerance to ODA abuse

Hoang Mai, Vietnam Investment Review
March 1, 2007

Vietnam has vowed to settle its notorious PMU18 scandal in a strict and
transparent manner in a bid to revive the international donor
community’s confidence in the proper use of official development
assistance, reports Hoang Mai for Vietnam Investment Review.


The Vietnamese state road building agency PMU18 has been at the center of a massive corruption scandal
after it was uncovered that foreign loans the agency had received for
infrastructure projects had been misspent on among other things, luxury cars
and fancy equipment. Originally a project management unit which was
supposed to dissolve after the completion of its first assignment,
PMU18 now manages dozens of road and bridge projects involving more
than US$2 billion in external loans. The management of foreign loans –
in the form of official development assistance (ODA) – is guided by a
governmental decree. Projects are all initiated, implemented and
overseen by different government bodies without the supervision of
other agencies, including the National Assembly. Subsequently, the
issue of making effective use of foreign loans and preventing leakage
has been seriously debated.

To salvage its reputation with international donors, Vietnamese Prime Minister Nguyen Tan Dung told donors at a meeting in Hanoi that:

“We are fully aware of our responsibility in the use and repayment of
ODA funds to both international aid donors and our people,” and
stressed that the PMU18 scandal had identified the weaknesses inherent
in ODA state management and the need for drastic measures to be
implemented to prevent fund misuse.

The case of PMU18, under the management of Vietnam’s Ministry of
Transport, shook the nation when police discovered that its director
Bui Tien Dung had been gambling millions of dollars on English and
Spanish Premier League football matches.

Upon receiving this information the police investigated the financial
activities of PMU18, which is assigned to manage nearly $2 billion
worth of funding from different sources to construct many of Vietnam’s
major infrastructure works including the National Highways 1 and 5.
Initial investigations revealed massive corruption, gambling and abuse
of power within the management unit involving some top ministerial

No formal conclusions from investigations have yet been forthcoming but
the government claims its Ministry of Transport has undertaken a
serious internal review of the case.

Prime Minister Dung also told donors that $258,000 in loans made by the
Japan Bank of International Cooperation to Vietnam, which had been
misspent by PMU18 on the purchase of luxury vehicles, would be

Categories: Foreign Aid

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