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Two Projects Managed By VRA, PMU 18 And Provincial PMUs Using World Bank Loans: Irregularities Found, But No Evidence Of Fraud Or Corruption By PMU 18 Officials

Available in: Tiếng việt

Contacts:

World Bank in Vietnam: Nguyen Hong Ngan  (84-4) 934 6600 – 234
nnguyen5@worldbank.org

Ministry of Transport: Mr. Ha Khac Hao
Deputy Director, Department of Planning and Investment
Tel: (84-4) 9426009
Mobile: 0903.212.433

 

Hanoi, May 28, 2007 – The Ministry of Transport, in cooperation with the World Bank in Hanoi today, organized a press conference to announce the findings of the Detailed Implementation Review of the Rural Transport Project 2 project and the Road Network Improvement Project, funded by the World Bank.

This is an independent review by the World Bank Department of Institutional Integrity, conducted from May to September 2006 in Vietnam, triggered by the case of the PMU 18.

The Ministry of Transport and the Vietnamese authorities neither intervened nor participated in the reviewing, analyzing and providing the content and results of this Review.

The aim of this Review was to identify shortcomings and weaknesses in the project management systems and propose effective remedies, as well as to determine whether there were corruption or wastefulness practices in the management of these two projects.

The Review also stresses that its inspections, researches and findings do not aim at allocating responsibility to specific individuals or firms. It should not be used as a basis for initiating any administrative, civil or criminal proceedings.

The Review shows that there is no evidence supporting allegations of fraud and corruption against PMU 18 officials. The two projects have achieved their expected results, having positive socio-economic impacts.

However, the Review revealed shortcomings in transparency and accountability controls in PMU 18 such as lack of integrated accounting systems. It further identified irregularity indicators such as submission of withdrawal applications with misleading information and taking excessively long time to effect payments.

The Review also exposes limitations, shortcomings and weaknesses in procurement procedures, financial management and project implementation with different degrees of seriousness at different levels of management in these two projects.

Indicators of irregularities were pervasive at the provincial PMUs implementing these projects. Irregularities included misrepresentation, deviation from World Bank’s procedures, and influencing contract award. The Review also found that workmanship in contract implementation had been substandard in some cases, especially in relation to the long-running Rural Transport Project 2.

Mr. Martin Rama, acting Country Director of the World Bank in Vietnam said “The Review exposes various systemic weaknesses in the implementation of the two projects.  We will not declare mis-procurement, and will not request further investigation, although we reserve that possibility if problems arise in the future. But we see a need to draw lessons from this Review.”

From those analyses and evaluations, as well as lessons learnt from those two projects, the Review provides some recommendations that the World Bank will cooperate with Vietnam to implement. In the short term, it proposes to develop an action plan to combat corruption and wastefulness in the implementation of ODA projects in the transport sector in Vietnam, and to strengthen the financial management systems within the PMUs. In the medium term, it recommends strengthening the mechanisms for handling complaints and expand public disclosure of project information to improve public surveillance.

Addressing the press conference to announce the Review, Vice Minister of Transport, Mr. Nguyen Hong Truong said that “The Ministry of Transport and provincial authorities will seriously consider this Review. The Vietnamese government and the Ministry of Transport have made various basic improvements to investment management for rectification work. Lessons from some shortcomings in the Rural Transport Project 2 have been reflected in the Rural Transport Project 3, which was signed between the World Bank and the Vietnamese government just two weeks ago. We will seriously consider the recommendations by the Review for future projects.”

The Ministry of Transport highly appreciates the recommendations of this Review.

The Ministry of Transport, Vietnamese Government authorities as well as the officers and experts from the World Bank in Vietnam have agreed to cooperate to evaluate the shortcomings in the future, so that the implementation of the future cooperation between the World Bank and Vietnam will be better.

 “We will intensify cooperation with the government towards better systems to manage and implement ODA- funded projects and public investment projects.” Mr. Martin Rama added.

The findings in the Review do not have any negative influence or impact on World Bank’s partnership with the Government of Vietnam, affirming World Bank’s commitment to help Vietnam become a middle-income country.

Cooperation between the World Bank and the Government of Vietnam continues to be guided by the Country Partnership Strategy for the 2007-2011 period, which was approved earlier this year. Recent and forthcoming milestones in this cooperation include the agreement on Rural Transport Project 3 signed on May 17, 2007, negotiations for the sixth Poverty Reduction Support Credit 6 on May 21, 2007, the approval of the Mekong Delta Transport Infrastructure Development Project on May 22, the mid-year CG Meeting to be co-chaired by the Government and the World Bank on June 1st, and a series of concessional credits worth 465 million USD to be approved during June 21-26.

Looking forward, the two sides commit to continue improving their cooperation for a Vietnam of prosperity, sustainability, stability, and peace.

Detailed Implementation Review of two World Bank-funded Transport Projects - Findings and Implications (PDF file, 69 KB)

For more information about the World Bank in Vietnam, visit: http://www.worldbank.org/vn




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