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Central Government, Policy

Vietnam e-govt scam case prompts procurement rethink

By Robin Hicks | 13 January 2010

The Asian Development Bank (ADB) has urged developing countries to embrace transparency and accountability in their procurement practices following the news that a former Vietnamese deputy minister faces corruption charges over the failed e-government venture Project 21.

Vu Dinh Thuan (pictured), former deputy head of the Vietnam’s Government Office, who spearheaded a project to computerise the country’s entire administrative system, and 22 others, is being charged with ‘abuse of power’, according to the indictment.

Thuan allegedly violated bidding regulations when be made purchases for computing equipment at inflated prices causing losses of more than VND4.6 billion (US$250,000) to the state exchequer, of which he claimed VND275 million (US$15,000) as his own.

Project 112, which was part of a ten-year administrative reform program that began in 2001, was supported by an ADB-approved US$45 million loan. However, the project proved unsuccessful when it ran over budget.

Ayumi Konishi, ADB’s Country Director, told FutureGov that more effort needed to go into preventing abuses of the public procurement process in Vietnam and other developing countries.

“Whether it is physical infrastructure or the introduction of e-government, preventative measures need to be incorporated into future development plans to safeguard the integrity, transparency and competitiveness of the procurement process,” he said.

Konishi added that while an overhaul of Vietnam’s procurement process was necessary, he didn’t think that the legal proceedings would hinder the roll-out of e-government initiatives in Vietnam in the future.

So how can the Project 112 scenario be avoided?

Karen Copeland, formerly a civil servant for the Queensland Public Service in Australia, and now Industry Principal, Social Services & Constituent Services, Public Sector, for SAP Asia Pacific & Japan, told FutureGov that a similar situation to Vietnam’s could arise if full disclosure, due diligence and auditing systems are not sufficiently robust.

“Procurement is a complex process that requires a clear understanding of the business process framework. First, at the planning stage, you establish a project’s objectives, assess risk and set accountability performance measures,” advised Copeland. “All decisions need to be well documented.”

“Once you go to market with a project, you need a system that can handle the contract application process and that can appraise the application process. All of this needs to be clearly articulated and recorded. You also need to establish the nature of the contract, the terms and agreement, and how you monitor progress on payment.”

Finally, Copeland added, governments need to ensure that a project is an “evidence-based investment. “Most importantly, you need to show that a project will deliver value for money. Does your project deliver you a social or financial return?”

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