GOTCHA, Published in The Philippine Star, Monday, January 28, 2008
A former consultant of the group that bagged the national broadband network deal has come forward to confirm gross overpricing. Showing the group’s actual project cost, he said the kickback from the project was even more than whistleblowers and telecom technologists estimated.
Requesting anonymity for now, the insider said their true cost for equipment and services in early 2007 was only $98,581,643 (see table). The supply contract that the Dept. of Transport and Communication awarded to ZTE Corp. of
From the source’s revelation, overpricing was almost $231 million, or 70 percent of the contract rate. This overshadows the $197 million that Joey de Venecia III and industry specialists said to be the kickbacks (Gotcha,
The consultant said the “Filipino group” that lobbied for ZTE had invited him to handle the technical side. Knowing the real telecom industry rates, he then came up with $69,083,643 for Equipment. This ballooned to $194,051,628 to accommodate part of the kickback of $125 million.
The source affirmed the experts who submitted overpricing estimates to the Senate — that still more kickbacks were concealed in the Services. The ZTE/DOTC contract shows a figure of $135,429,313 for such services as engineering, management, training, etc. The consultant said that ZTE technical men had told them the company actually would spend no more than $29,498,000 for the services. This meant more kickbacks totaling $106 million.
The Chinese admitted that their real project cost, without kickbacks, would be roughly $132 million, the source said. This bare figure also came up in the Senate testimony of de Venecia in baring a supposed meeting in Shenzhen with then-Comelec chairman Benjamin Abalos and associates.
The consultant recounted that he and other hirelings questioned the ZTE men about the $35-million discrepancy in bare figures. He said they later found out it was the ZTE profit to be divvied up by ZTE executives and his principals.
| ITEM | | | ZTE/DOTC | | ACTUAL |
| | | | | | |
| Equipment | | | | | |
| | | | | | |
| A. Transmission Backbone, | | $ | 87,083,904 | $ | 31,717,433 |
| DC Power & Gen Set, | | | | | |
| Information Security System, | | | | | |
| Monitor & Environment, | | | | | |
| Network Mgt. System, | | | | | |
| IP Backbone | | | | | |
| | | | | | |
| B. Regional WiMax, | | | 82,077,545 | | 19,753,200 |
| | | | | | |
| CPE Outdoor Radio Module, | | | | | |
| Baseband Cable, Others | | | | | |
| | | | | | |
| C. VoIP: CPE, Others | | | 15,175,887 | | 11,876,600 |
| | | | | | |
| D. Data Center/NOC | | | 8,977,882 | | 5,000,000 |
| | | | | | |
| E. Freight | | | 649,636 | | 649,636 |
| | | | | | |
| F. Transport Insurance | | | 85,774 | | 86,774 |
| | | | | | |
| Total | | $ | 194,051,628 | $ | 69,083,643 |
| | | | | | |
| Services | | | | | |
| | | | | | |
| Site Preparation & Civil Works, | | $ | 118,695,527 | $ | 18,000,000 |
| System Implementation & Engineering, | | | | | |
| Site Engineering for Remote Office Sites | | | | | |
| Project Mgt Office | | | | | |
| Managed Services | | | | | |
| | | | | | |
| Services for IDC Construction & Integration | | | 8,287,281 | | 4,000,000 |
| | | | | | |
| Link charges (3 years) | | | 6,498,000 | | 6,498,000 |
| | | | | | |
| Training | | | 1,948,505 | | 1,000,000 |
| | | | | | |
| Total | | $ | 135,429,313 | $ | 29,498,000 |
| Total Project Cost | | $ | 329,480,941 | $ | 98,581,643 |
| | | | | | |
