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Japan's Aid Agency Voices Concerns Over Vietnam's Handling of ODA Loans for Metro Projects

The Japan International Cooperation Agency (JICA) is not happy about how the Vietnamese government manages its official development assistance (ODA) loans.

JICA held its annual press conference in Hanoi last Wednesday, where Japanese officials voiced their concerns over the financial aspects of Japan-backed infrastructure projects – including two prominent metro lines in Saigon and Hanoi, Tuoi Tre reports.

The agency emphasized the late or halted disbursement of ODA funding for the metro projects – especially Saigon’s first line – as the root of the concern, apart from delays in repayment for Japanese contractors involved in such projects.

According to JICA, by the end of September, these late payments had reached ¥4 billion (US$35.42 million). If local authorities continue to delay capital allocation for these crucial projects, this figure could balloon to ¥20 billion (US$177.1 million) by the end of the year.

JICA’s ODA loans for 2017 were approved in January; however, the agency shared that decisions about next year’s funding haven’t been discussed yet.

Fujita Yasuo, JICA’s chief representative in Vietnam, said that the Japanese government has “refrained from commenting on the possibility of a reduction or cessation of ODA loan grants to Vietnam.”

Nonetheless, Yasuo added that Japan has two main concerns about Vietnam’s treatment of its money.

First, a recurring failure to set a reliable payment schedule for ODA-funded projects has caused JICA to hesitate when deciding whether to grant Vietnam more loans in the future. Second, the funding comes straight from tax money contributed by Japanese citizens, who may decide to withdraw their support for their country’s lending policies in foreign nations such as Vietnam.

Back in April, Saigon officials said that the city’s first metro line may not be completed on schedule due to a delay in fund disbursement from top-rung authorities. Recently, it was announced that construction on the Ben Thanh-Tham Luong Line – Saigon’s second – will also be postponed to at least 2020 due to troubles with the resettlement process.

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