Japan Halts Fresh Loans for Vietnam on Alleged Corruption

Hanoi, June 2 (Jiji Press)--The Japanese government said on Monday that it will suspend extending fresh yen loans to Vietnam, after a new bribery scandal involving a Japanese consulting firm and the Southeast Asian country's railroad authority came to light. The Japanese Foreign Ministry notified the Vietnamese side of the loan suspension at an anticorruption panel meeting in Hanoi. It is the second time for Japan to halt yen loans to Vietnam due to a payoff scandal, after it did so over the 2008 case. According to an investigation report by Japan Transportation Consultants Inc., the consulting firm in question, JTC paid 66 million yen to officials of state-owned Vietnam Railways between late 2009 and February this year to win an order for the authority's urban railroad project in the Vietnamese capital. At the panel meeting, Japanese officials told their Hanoi counterparts that extension of fresh yen loans to projects involving Vietnam Railways will be halted while loans to other projects will be provided on condition of anticorruption measures being worked out. Japan and Vietnam will hold the next panel meeting later this month to discuss the preventive measures. At least until the meeting, there will be no fresh yen loans to Vietnam, the largest recipient of Japan's official development assistance. In related developments, the Japanese government notified the Uzbek government last week of its decision to stop giving fresh yen loans and will send a similar notice to the Indonesian government, after JTC was found to have paid 72 million yen and 27 million yen in bribes over railway projects in Uzbekistan and Indonesia, respectively. END