The World Bank's Detailed Implementation Review (DIR) of whether aid was misused was launched after the director of a Transport Ministry project management unit (PMU) was arrested for gambling away $7 million.

"The DIR found no evidence supporting allegations of fraud and corruption against PMU 18 officials," Martin Rama, acting director of the World Bank in Vietnam, told a news conference.

The scandal emerged last year, raising concerns among donors over the use of aid.

Police have detained a deputy transport minister. Transport Minister Dao Dinh Binh resigned in April 2006 even though he was not accused of any wrongdoings.

Rama said the review examined two projects that used the World Bank's funds to build more than 1,800 roads in 40 provinces in Vietnam between 2000 and 2006 and also to maintain and improve 1,700 km (1,060 miles) of national roads since 2004.

He said the rural road building project closed on time last year within the budget of $145 million.

But "indicators of irregularities" were found in the handling of 285 contracts out of the total 742 awarded for the projects, including weaknesses in the handling of tenders, poor financial management capability and slow implementation.

The bank said it would not point a finger of blame at specific individuals or firms.

Vietnam's Transport Ministry acknowledged the problems.

"The capability of local officials is limited as they do not have experience in handling international tenders," Ha Khac Hao, deputy head of the ministry's planning and investment department, told the news conference.

"The procedures for approval are complicated with too many signatures required," Hao added.

The World Bank said the findings would not have a negative impact on its activity in Vietnam, one of the top recipients of its aid.

The findings were published ahead of a June 1-2 meeting of Vietnam's donors to review the implementation of government commitments made last December as Vietnam sought to improve its under-developed infrastructure and sustain high growth.

Donors pledged $4.45 billion in aid to Vietnam for 2007, up one-fifth from the $3.7 billion pledged for 2006, and urged the country to accelerate its move towards a market economy.

Source: Reuters