Japan's foreign ministry announced that it would reopen funding to new Official Development Aid (ODA) projects in Vietnam after a halt in June meant to allow for an investigation of bribery allegations at Vietnam Railways.
Vietnam News Agency reported that the Japanese government decided to resume its ODA activities in Vietnam after agreeing with the latter on measures to prevent similar corruption in the future.
Yomiuri newspaper broke the story in Japan in March, reporting that a Japanese contractor had bribed Vietnam Railway executives to secure a $41 million public contract to build the Urban Railway No.1 in Hanoi.
On June 2, the Japanese said they would suspend new ODA funds to focus on dealing with an alleged US$782,000 bribery case involving Tokyo-based Transportation Consultants (JTC) Inc. and executives at Vietnam Railways (the country’s state-owned railway operator).
The Japanese ministry said they are restoring the funds on the condition that Vietnam commits to investigating all ODA projects involving JTC and Vietnam Railways, and pledges specific measures to stop future graft.
Nguyen Huu Bang, former Vietnam Railways director and board chairman who held his posts during the time that the bribery allegedly occurred, has been detained with six other officials from the company pending an investigation.
Three former JTC directors were also detained in Japan on July 10 after being charged with violating trade competition rules.
It’s not the first time Vietnam transport officials have caused problems for its top donor, which pledged a further $1 billion in ODA loans to Vietnam this year.
In December 2008, Japan suspended hundreds of millions of dollars in development loans in Vietnam and only resumed a year later after discovering $262,000 worth of bribes had been paid during an ODA project in Ho Chi Minh City.
Huynh Ngoc Si, former deputy director of the HCMC Transport Department and head of a highway project linking the city's east and west ends, was convicted of receiving the cash from Japanese Pacific Consultants International executives who were hired to consult on the project.
Si was originally sentenced to life in prison in 2010 but an appeals court in 2011 reduced his term to 20 years.