Japan’s ambassador to Vietnam Mitsuo Sakaba (2nd, L) and Vietnamese Minister of Planning and Investment Vo Hong Phuc (2nd, R) exchange signed documents in Hanoi Tuesday.

Vietnam on Tuesday pledged to use aid loans from Japan effectively, after the two sides signed an agreement resuming the flow of aid suspended during a corruption scandal.

Tokyo announced in February that the yen loans would resume after it said Vietnamese officials gave assurances that steps would be taken to prevent similar abuses.

As a result, Japanese ambassador Mitsuo Sakaba and Vietnam’s Minister of Planning and Investment, Vo Hong Phuc, signed a deal Tuesday for low-interest loans covering projects worth Â¥83 billion (US$848 million).

At the signing ceremony, Phuc called the kickback case involving Pacific Consultants International (PCI) “a little dot in the very great picture” of Japanese assistance to Vietnam.

He expressed hope that aid from Japan - already Vietnam’s biggest bilateral donor - would increase, “and we commit to use this very effectively.”

Sakaba cited efforts by Vietnam to improve the legal environment and increase measures to strengthen management and effective use of Official Development Assistance projects, “including that on fighting corruption.”

Tsuno Motonori, chief representative of the Japan International Cooperation Agency in Vietnam, told AFP that Japan will closely monitor how Vietnam implements the measures.

The loans that began flowing on Tuesday cover what Phuc called Vietnam’s most important infrastructure projects: an underground railway for the capital Hanoi, drainage and environmental improvements in Hanoi and Hai Phong, and rural bridge improvements.

Last week a Tokyo court handed a suspended jail term to Masayoshi Taga, former president of PCI, who was convicted of giving $220,000 in bribes to a Vietnamese official in charge of a highway project in Ho Chi Minh City.

In January the court imposed a fine of ¥70 million on the company and sentenced three other former executives to suspended prison terms.

Source: AFP