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A Tokyo-based consultant firm commissioned by the government to build telephone networks in Bhutan misused about 195.6 million yen of the project disbursement under a grant aid, a Foreign Ministry investigation report said Wednesday.

The Bhutanese government and Mitsui & Co. were also involved in misappropriation in the 6.1 billion yen project, according to the report.

Misuses of the disbursement included Nippon Telecommunications Consulting’s purchase of 11 four-wheel drive vehicles worth about 41 million yen. That kind of purchase is forbidden under the project, the report states.

Bhutan’s telecommunication ministry requested the vehicles, according to the report. The misappropriation came to light in October 1997 when Japanese aid workers found Japanese-brand vehicles lacking ODA logotypes, which are usually attached to equipment used in Japanese ODA projects.

The ministry and the Japan International Cooperation Agency, affiliated with the ministry, sent six investigative missions to Bhutan to uncover the misuses, according to ministry officials.

About 66.1 million yen was misused for training Bhutanese involved in the project by inviting them to Japan instead of conducting training in Bhutan, the report says.

An ODA rule states that training should be conducted in the country where the project is being promoted, the ministry officials said. Other misappropriation included modifications to the project without permission, the report says.

Mitsui & Co. was involved in a modification, although it did not actively push for it, the report says.

The government asked the Bhutanese government to repay about 53.5 million yen and called on it to take appropriate measures to prevent a recurrence, according to the report, adding that how the money will be repaid will be subject to discussions between the Bhutanese government, the consulting firm and Mitsui & Co.

About 142.1 million yen earmarked for the project has not been disbursed, and the government will not do so, the report says.

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