Radical PMU makeover reconstructured

The regulation, which aims to clarify the organisational structure, functions, and obligations of key personnel involved with project management units (PMUs) should be submitted to the prime minister by June, this year.
An official from the ministry’s External Economics Department, which is assigned to draft the regulation, said this move aims to legalise PMUs current status and thus help improve its foreign aid management ability.
It is estimated that there are nearly 1,000 PMUs nation-wide managing infrastructure development projects. According to the government’s figure, more than $10 billion of foreign aid have already been disbursed so far.
A PMU is generally set up following a decision by a ministry or provincial people’s committee whenever they have a project to implement. In this case the PMU does not own the project, but is under ministerial or provincial control.
A term in Decree 17 on ODA management also defines that a PMU is a representative agency for the project owner.
In addition, in a legal sense a PMU does not operate as a business because so it does not have to follow the enterprise law.
Therefore, PMUs organisational structures, functions and obligations are very different from each other, depending on the decision of the authorised agency in charge.
“A PMU does not operate according to any laws. So this has led to some personnel rorting the system, such as the scandal of PMU 18,” said the official.
The case of PMU 18, under the management of the Ministry of Transport, shook the whole nation when police discovered a month ago that its director Bui Tien Dung had been involved in betting tens of billions of dong on English and Spanish Premier League football matches.
Upon receiving this information the police investigated the financial activities of PMU 18, which is assigned to manage nearly VND33 trillion ($2 bn) worth of funding from different sourses to construct many Vietnam’s major infrastructure works including the National Highways 1 and 5.
An MPI official confessed that the case would have an “unprecedented and terrible impact” on relations between the Vietnam and the assistance donors.
“PMUs need to be restructured because the model, which was formed in the subsidy economy decades ago, is now outdated” said Pham Sy Liem, Vice Chairman of Vietnam Construction Association.
“This is very essential for aid effectiveness, especially after the case of PMU 18,” he added.
In response, Pham Tang Loc, head of the Personnel Organising Department of the Ministry of Transport and Communication, which manages PMU 18 said they were considering turning the PMU into a project management and consultation business.
Loc said this move aimed to cope with prevailing waste as well as strengthen investment management.
Although the regulation was being drafted, the MPI official said he supported the initiative to turn the PMU into a project management and consultation business.
“When a PMU turns into a company, it has to obey the laws. The government will buy its products — in this case infrastructural works — if quality is assured,” he said.
ODA commitments for Vietnam have accumulated to over $35 billion to date.


No. 754/March 27-April 2, 2006