Finance Minister Keat Chhon has called on the Ministry of Rural Development to punish officials involved in the mismanagement of rural road projects, saying the action is critical to obtaining large portions of Japanese aid.
“Every decision made by the government regarding the rural road projects is a key for Japan to make a decision if it resumes new aid to Cambodia,” Keat Chhon wrote in a Dec 1 letter to the Rural Development Ministry. “Please send a report on punishments or other measures imposed on officials involved.”
But the Rural Development Ministry has yet to act on the finance minister’s request, which was made at the urging of Japanese Ambassador Masaki Saito.
Japan is the largest direct donor to Cambodia. While the amount in controversy is less than $600,000, it could affect the future of a Japanese aid program that totaled $61 million between 1994-96. Observers also say the case could be emblematic of the government-wide corruption.
At issue are six rural road projects for which the Rural Development Ministry requested a total of $570,000 in reimbursement in May. The request was made to the Finance Ministry for disbursement out of a special Japanese aid account.
In late July, Japan asked the Finance Ministry to conduct an investigation of the road projects because the donor had found that one of the six projects appeared to be built for private use, and two other roads seemed to have already been paid for by a German-funded program.
In its investigation, the Finance Ministry concluded only one of six projects “was duly executed” and qualified for reimbursement, according to a letter Keat Chhon sent to the Japanese Embassy in late October.
Keat Chhon then reported to Japanese officials that the Finance Ministry would set up a unit to better monitor the Japanese aid account. However, Japanese officials said more needed to be done than just stricter management. “We have requested the Cambodian government to take necessary measures on the mismanagement of the funds,” Saito said Monday. “Officials involved in the wrongdoing should not be allowed to keep the same positions at the ministry.”
Saito maintained that Japan would not resume non-project grant aid unless the government takes disciplinary measures.
Japan gave an equivalent of $61 million at current exchange rates of non-project grant aid between 1994-96. The grant aid, which is linked to the International Monetary Fund, was halted when IMF withdrew from Cambodia in late 1996. Now that the IMF has decided to return to Cambodia, the two governments have started talks about resuming the aid.
Rural Development Minister Chim Seak Leng (Fun) maintained Monday the ministry has not been able to either discover who committed the wrongdoing or take any action to correct the mismanagement.
“We still haven’t found out who did what on the matter,” he said, noting that a meeting of top officials last week on the issue was unsuccessful.
“We will meet again this week to figure out what mistakes our ministry have made and who was involved in that.”
Rural Development Secretary of State Yim Chhai Ly (CPP), who oversaw the projects and requested the disbursement, admitted in May that he had submitted false documents as if to indicate the projects were under construction rather than already completed. But he has maintained that the ministry is actually owed the money so it can repay the private companies that did the work. “I understand the Japanese government is not happy about the six projects,” Yim Chhai Ly said Monday. But he reiterated that all the projects were actually done and implied that Japan is overstating the seriousness of the matter.
“It’s not a big problem…I will show officials of the Japanese Embassy and the Finance Ministry that the Japanese money would be used for people in Cambodia who need quality roads,” Yim Chhai Ly said. “I will talk to Keat Chhon about it.”
During a Cambodia Daily investigation earlier this year, officials claimed all the projects were completed two years ago, one year before Japan approved them.
, although the disbursement documents said the work on the projects was ongoing.
When officials of the Japanese Embassy and the government toured the sites in July, they found that a 7-km road in Phnom Penh was surrounded by barbed wire and two gates. The team also found the two Kompong Cham roads had signs bearing the name of TRIP, a German-funded road-improvement program.
(Additional reporting by Ham Samnang)