Vietnam Railways, the state-run enterprise that manages the country’s railway system, and the Vietnam Railway Authority have been stripped of the position of managing dozens of multimillion-dollar projects following a series of scandals.

The Ministry of Transport will directly manage the 18 projects, including 13 ODA-funded ones, Minister Dinh La Thang said in a directive.

Seven out of the 13 projects using ODA (official development assistance) are under construction, while the remainder are scheduled for implementation in near future.

Vietnam Railways and Vietnam Railway Authority are requested to merger their project management units into one project management board, which will be overseen by the transport ministry, according to the fiat.

The move by the transport minister followed a series of scandals of the railway sector that have recently been brought to light.

Many chief officials of the project management units of the Vietnam Railways and Vietnam Railway Authority were either arrested, indicted, or removed from their positions for their wrongdoings at major projects such as the Yen Vien – Ngoc Hoi and Cat Linh – Ha Dong railway projects in Hanoi.

Most of the 13 railway projects transferred to under the management of the transport ministry require thousands of billions of dong, and even more than US$1 billion.

The Hanoi urban railway project, from Yen Vien to Ngoc Hoi, for instance, needs VND19.5 trillion ($917.82 million) for its first phase of construction, and VND24.82 trillion ($1.17 billion) for the second one.

More than VND5.76 trillion ($271.11 million) will be allocated for the project to renovate and upgrade the Yen Vien – Lao Cai rail track.

Investment for the project to modernizing the information and signal system on the Vinh – Ho Chi Minh City track on the north-south railway is also as much as VND2.4 trillion ($112.96 million).

All of the investments will be funded by ODA loans from Japan and China.

Five of the 18 projects will be funded by Vietnam’s state budget, including two under-construction projects and three planned ones.

Not linked to scandals?

In March Japan’s Yomiuri Shimbun newspaper reported that the president of Japan Transportation Consultants, Inc. (JTC), admitted allegations that his company had paid over $780,000 in kickbacks in Vietnam to win an order for a $41 million ODA project.

The company is believed to have paid the kickbacks to five government employees, including a senior official of an office responsible for project administration at Vietnam Railways.

In May the Vietnam’s Ministry of Public Security put four railways officials involved in the scandal in custody for investigation, including deputy general director of the Vietnam Railways.

But Deputy Minister of Transport Nguyen Ngoc Dong denied the link between the ministry’s fiat and these scandals, saying it meant to “restructure the railway sector.”

“Projects assigned to the Vietnam Railways and Vietnam Railway Authority have been making slow progresses but they are not stripped of the management out of poor ability and performance,” Dong told Tuoi Tre (Youth) newspaper.

“Instead of focusing on the implementations of major projects, the Vietnam Railways will now have more time to improve its ability and performance.”

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