Japanese firm gets 36-month ban in bribery scandal

According to the announcement sent by the Ministry of Transport (MoT) to VIR last week, the ban will be effective for 36 months, from April 30, 2014.

“During this time, Japan Transportation Consultants (JTC) will not be allowed to participate in any work on Japanese official development assistance (ODA) projects, including via joint ventures,” the MoT announced.

JTC admitted to bribing civil servants in Vietnam, Indonesia and Uzbekistan to win contracts for Japanese ODA-funded projects. JTC paid civil servants ¥80 million ($780,000) in bribes for a $41 million design consultancy contract for Hanoi’s urban railway line 1 project.

The ban follows requests from Japan International Co-operation Agency (JICA), which co-ordinates Japanese ODA in Vietnam.

In a meeting held in Hanoi on June 2, 2014 to discuss the bribery allegations, the Vietnamese and Japanese  sides agreed upon a raft of measures, including JICA’s suspension of ODA disbursement to the contract packages that were mentioned in the JTC’s third party committee report. The disbursement at other ongoing ODA projects/contract packages without JTC that were not mentioned in the JTC’s third-party committee report would be continued.

Meanwhile, Vietnam would keep on investigating other JTC-involved projects which were invested in by Vietnam Railway.

According to the MoT, JTC is currently involved in 14 projects in Vietnam.

The two sides also agreed that Japan would consider accepting proposals for new projects to be executed by other agencies if the Vietnamese government assured the government of Japan that it would investigate the alleged corruption cases and deploy effective measures to prevent a recurrence

An official at Vietnam’s Ministry of Planning and Investment last week told VIR that the Japanese government had just resumed such consideration after a short pause.

The JTC’s bribes were paid from 2008 to February this year. JTC won the design consulting contract for Hanoi’s urban railway line 1, which is one of the city’s most important urban infrastructure projects.

The line will link the north and south of the city over 19 kilometres. The metro line 1 will cost an estimated $923 million, of which around $666 million will be funded by JICA through Japan’s official assistance development.

The Vietnamese government has arrested six transport officials involved in the case.