The local government of Tien Giang Province has refused a VND4.2 trillion (USD200 million) grant offered by a foreign group because they said it was for infeasible proposals.

Tien Giang provincial government turned down the aid, despite their need to upgrade many deteriorating infrastructure.

In recent days, public concerns have been raised over a fact that a group called “Diamond Access Inc.” in the Asia-Pacific region offered to grant USD10 billion per year to Vietnam for infrastructure construction. Tien Giang Province is among the list of benefactors.

However, the province People’s Committee turned down the proposed aid of VND4.2 trillion.

“We didn’t sign any documents but reported the case to the provincial government, who finally turned down the proposal. I have no comment when it comes to the source of this funding, but Tien Giang Province has yet to receive any aid for road construction since I was appointed to my post. In fact, it’s really hard to get non-interest loans, let alone such a huge aid,” said Nguyen Van Hung, Director of the provincial Department of Transport.

The case started in August, when Le Van Dang, Director of Dong Thap Muoi Development, Construction and Invest Company, headquartered in Tien Giang Province, proposed that provincial authorities approve a project to build roads 878 and 871B using grants from Diamond Access Inc.” in Asia-Pacific.

According to Dang, Diamond Access Inc.’s humanitarian development fund is headed by Paul Le Hung, a Vietnamese Overseas in the US. The group pledged to provide an annual aid of USD10 billion to Vietnam on conditions that the State Bank of Vietnam (SBV) must provide a guarantee worth USD10 billion for the group and information about the funding must not be made public.

Le Van Dang said he knew about Paul Le Hung via a friend in HCM City. “Hung said that he represented a foreign humanitarian development fund and proposed me to seek for investment projects. Local governments won’t have to pay for anything.”

Dang added that the requirement for a guarantee of the USD10- billion was not came with strings attached. He did not turn down the grant outright but said that he would consider it once the funds reached Vietnam. He said that there were many regulations in the country restricting the taking of such funds that must be met.

When informed about the issue, local police started an investigation into the case and found that there was no foreign group called Diamond Access Inc. in Asia-Pacific, and that Hung is just working for a gemstone trading company.

However, Hung signed a "memorandum of understanding" with some localities in Vietnam including Soc Trang and Thai Nguyen.

On November 27, Hung answered one reporter’s questions via mobile phone and insisted that he is a representative of a direct humanitarian fund in Asia-Pacific that aims to finance regional companies. The fund belongs to Diamond Access Inc. headquartered in New York.

He said that each country would receive USD10 billion in aid per year and disbursements would be worth from USD1-3 billion each, and the government must provide a guarantee.

An anonymous official from the SBV said that the bank has no function in providing any guarantee for foreign loans by local governments or enterprises.

According to him,  in recent years, both the SBV and the Ministry of Finance have received the same proposals and have warned local authorities to be careful about such lending.