Lozada was in Palace meetings on NBN

GOTCHA, Published in The Philippine Star, Wednesday, January 30, 2008

Holes remain unfilled in the national broadband caper. Foremost is why, if the $330-million supply from China was so upright, did President Gloria Arroyo have to scrap it? Her rah-rah boys cannot claim in answer that she only heeded public clamor. She’s not one to succumb that easy and they know it. Why, they jumped for joy like chimps when she stated many times that she’d rather be right than popular. It would look silly for them to babble now that she pines to be well liked after all even if wrong.

At any rate, that nagging question of canceling what was supposedly a dandy contract might be explained today. That is, if the Senate’s surprise witness shows up and bares all at the 7th hearing on the broadband scam.

Problem is, he’s no surprise anymore. The media have broadcast his name and other personal circumstances. For that reason, Rodolfo Noel I. Lozada Jr., CEO of state-owned Forestry Corp. and supposed eyewitness to trickery, has said he might no longer show up. So the question will remain hanging, and the sleazy events that preceded the signing of the DOTC-ZTE Corp. contract may never be fully exposed.

It’s all the fault of Blue-Ribbon Committee head Alan Peter Cayetano, according to Sen. Panfilo Lacson. Lozada allegedly had wanted to tell all he knows about the deal from which kickbackers would have got $200 million, three-fifths of the contracted price. But then, Malacañang operatives got to Lozada and convinced him to shut up with a combination of death threats and blandishments, Lacson lamented. And how did Palace men find out about Lozada? Well, by Cayetano’s own admission, he revealed the name of the secret witness last weekend. He had to, he said, for transparency, since the subpoena he issued Lozada last month was a public document signed not only by him but also Senate President Manny Villar, and Mar Roxas and Rodolfo Biazon of the two other committees investigating the fraud. Cayetano nonetheless acknowledged to being the leak. He told reporters he purposely had avoided them during the Christmas break so that they wouldn’t force him to break secrecy — until days ago. And so was redefined the meaning of secret witness.

What would Lozada have revealed had he not been put in jeopardy? The answer lies in part in the testimony of Joey de Venecia III, who blew the lid off the $330-million cheating. Roxas had asked him in a hearing in Sept. if he knew a certain Jun Lozada. De Venecia said yes, and that Lozada was present in some meetings with ZTE executives, presidential spouse Mike Arroyo, and then-Comelec chief Benjamin Abalos.

Lozada was no longer mentioned after that. But Lacson and Roxas apparently continued to receive more info. Word reached them that Lozada was conscience-stricken seeing Joey and other whistleblowers lay their lives on the line while he who knew more about the high crime was comfortably silent. And so Lozada decided to talk.

The first senator Lozada approached to tell his story was not of any help. If at all, it only proved to him that some opposition figures have been co-opted, although it’s not readily seen through their pretentious posturing. That senator allegedly told Lozada to not bother testifying because the tri-committee already was wrapping up the probe and drafting a report. (Cayetano said Monday he definitely will set more hearings if new evidence turns up.)

Lozada reportedly then prepared an affidavit of what he knows. The most telling segment allegedly is about a meeting in Malacañang on Apr. 19, 2007, two days before Arroyo witnessed the signing of the DOTC-ZTE deal in China. (That’s also the day then-Economic Secretary Romy Neri told me he nearly resigned due to unconscionable terms of the telecom supply.) Luzon’s main water source would have been sacrificed, along with soldiers’ housing, just to accommodate the overpriced deal.

What else is in the affidavit, the few remaining truly opposition senators prefer that Lozada himself say under oath. They’d rather not jump the gun. Too often have witnesses recanted testimonies freely given, because Palace fixers also got to them.

* * *

From a reader who prefers to remain anonymous: “I hold today’s STAR and am happy to see you keeping the NBN issue alive. I thank you in behalf of all those who cannot do so themselves. People appreciate what you are trying to accomplish through your column. Stay strong.

What mind-boggling kickbacks you expose! I experienced something similar first-hand when I was in government years ago. I was being told to sign a payment of P840,000 for printed forms that I knew were worth much less. I directed my senior staff to conduct separate canvasses for the same specs, so they’d realize the folly. The most prestigious publishing house at the time gave a quote of P50,000. So I know on a small scale what you are talking about. For truth and justice Filipinos must know about the NBN. After I decided to leave government, since I did not have the stomach for what lay ahead, my successor authorized the payment.

ZTE consultant bares true NBN costings

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 China in April totaled $329,480,941.

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, 23 Jan. 2008).

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
Data Bridge Outdoor Module,
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

* * *

Patuloy na katiwalian sa DPWH-Cordilleras

SAPOL Ni Jarius Bondoc, Pilipino Star Ngayon, Tuesday, January 29, 2008

MATAGAL nang iniaangal si Juniper Dominguez ang mga “himala” sa DPWH-Cordillera Autonomous Region. Sumulat na siya sa Malacañang, kay DPWH Sec. Hermogenes Ebdane, at sa mga obispo. Napapagod na siya sa pagbunyag ng niya’y pag-raid ng mga opisyal ng DPWH sa mga proyekto ni Presidente Gloria Arroyo nu’ng State of the Nation Address.

Tatlong katiwalian ang isinusumbong ni Dominguez:

• Malimit na 15% advance payments sa mga kontratista — miski walang supporting documents o legal na basehan;

• Pag-report sa TV news ni CAR Director Mariano Arquiza na tapos nang gawin lahat ng repairs sa mga depektibong bahagi ng Halsema Road — miski hindi totoo at para lang itago ang pagwawaldas; at

• Pagpa-construct ng three-story DPWH Rest House sa Sayangan, Benguet, sa halagang P4,944,000 miski hindi tapos at ni walang sahig o dingding.

Itong huli ang pinaka-lantarang kurakot. Makikita sa mga larawang ipinadala sa Malacañang at DPWH na walang sahig o dingding ang 1st at 2nd floors ng rest house. Third floor lang ang may bahaging dingding at sahig. Walang pintura ang mga dingding, ni hindi pa kinikinis ang hollow blocks at semento. Wala ring bintana, pinto, banyo, plumbing, kisame o ilaw. “Bare” ang tawag sa ganitong konstruksiyon. Pero halos P5 milyon inabot ang materyales, labor at management fees.

Bakit masasabing overpriced ito? Kasi, ani Dominguez, katatapos lang itayo ang mas malaki, mas maganda, at kumpletong two-story Data Elementary School, sa Benguet din, pero P3,300,000 lang. Makikita na ang iskuwelahan, na pinondohan ng Japan at ipina­tayo ng provincial capitol, ay tapos na tapos. Merong sahig at dingding, bubong at kisame, banyo’t tubig, kuryente’t ilaw, bintana’t pinto, pero hamak na mas mura. Makinis at pinturado ang pader, at may bakal na railings pa.

Nagpaimbestiga ang DPWH central office sa isang abogado. Ito rin ang nagtakip sa naunang nabunyag na katiwalian doon. Kaya ... wala rin!

Solusyon laban sa oil spills

SAPOL Ni Jarius Bondoc, Pilipino Star Ngayon, Monday, January 28, 2008

BUONG mundo ang nalulunod sa malimit na oil spills sa karagatan. Sa dami ng oil tankers na bumibiyahe sa lahat ng sulok ng daigdig, malaki ang tyansa na isa sa kanila ang sumadsad o mabunggo, at magsuka ng tone-toneladang krudo na nagwawasak ng kalikasan. Kaya simula Abril 2008 ilalatag ng International Maritime Organization ang patakaran: Lahat ng oil tankers ay dapat double hull na. Ang magpapatupad ng ruling sa Pilipinas ay ang Maritime Industry Authority, sa pamamagitan ng Memo Circular 2007-001 noon pang Enero 2007.

Sa Pilipinas nito lang nakaraang taon, tatlong oil spill ang naganap sa Semirara (Antique), Guimaras (Iloilo), at Ozamis (Misamis Occidental). Bilyon-pisong halaga ng laman dagat at tourist spots ang napinsala. Hindi matak­pan ng multa na mga ship owners ang pagkalugi ng mangingisda at resort operators. Kaya napapanahon ang pagbago sa double hull tankers. Ngayon pa lang, sina­sabihan na ng Petron, Shell at Chevron ang kanilang tanker contractors na mag-double hull vessels na.

Ang hull ay ang pinaka-katawan ng barko. Kapag doble ito, merong dalawang protective layer: Ang water-tight steel body sa labas, at ang dagdag pang bakal sa loob bilang backup kung sakaling bumigay o nabutas ang una. Hindi na papasukin ng tubig-dagat o tatagas ang kargang krudo kapag double hull na.

Mahal magpa-convert ng single hull tungo sa double hull: Umaabot sa $12-15 milyon para sa 5,000-ton tanker. Kung brand-new double hull, mahigit $35 milyon ang presyo.

Natural may mga ship owners na umaangal. Pinade-delay nila ang deadline sa pagbago sa double hull. Imbis na sa Abril, saka na lang daw.

Pero hindi ito maaari. International ang deadline; kapag sumuway ang Pilipinas, maba-blacklist ito sa international shipping. Walang choice ang tanker owners kundi sumunod sa patakaran. Kung hindi, baka wala silang makuhang negosyo mula sa oil companies. Archipelago ang Pilipinas, kahiya-hiya sa mundo kung tayo pa ang hindi makatupad.

NTC’s tardy decisions causing uncertainties

GOTCHA, Published in The Philippine Star, Friday, January 25, 2008

Congressmen will die of envy when they find out that the P200,000-Christmas bonus they awarded themselves is peanuts. The president of a government financial institution paid himself, his board directors and senior officers P2 million to P10 million each in loyalty bonus. The amount depended on how close they were to him.

A newcomer who has been there three years so has yet to prove his worth got a whopping P4 million just for being a yes man. Old-timers are too scared to talk, but murmur that the GFI might go bankrupt by the time the presidential appointees step down in 2010. To think that its funds are supposed to be used for the development of the Philippines.

* * *

Economist Hernando de Soto, analyzing in the ’80s why capitalism was failing in his native Peru, studied conditions in the United States. One of his disturbing findings was that it took at least three months to secure a business license in Lima compared to only three hours in Florida. Curious, Speaker Ramon Mitra in 1989 surveyed the Philippines and discovered it was worse at seven months.

Bureaucratic reforms have since been laid down. A code of conduct for public servants requires prompt, greaseless action on citizens’ requests. An anti-red tape law further sets the number of days within which agencies must act. Departments have instituted efficiency checks.

Still some government offices habitually drag their feet. The Dept. of Transportation and Communication’s refusal to issue its contract with ZTE Corp. was later understood as cover-up to overpricing. What could be the reason for decision delays at the National Telecommunications Commission?

One year is usual for the NTC to grant a permit or render a verdict. It took that long for VoIP to be approved as a new phone platform in 2006 — when Filipinos already were into Skype, Yahoo Messenger and GoogleTalk. Another case has been crawling far longer: whether foreign suppliers of local telcos should be treated as public utility operators and so subject to the Constitution’s rule for 60-percent Filipino ownership.

A case was filed in mid-2006 against Spanish content provider Zed for supposed breach of foreign investments laws. The company is a world leader in value-added services, like ring tones and wallpapers, as well as multimedia messaging. Zed then had just concluded a successful five-year venture with mobile service provider Smart when its ownership makeup was questioned. The issue affects other foreign investors like Chikka and Information Gateway Inc. that provide content to local telcos.

Zed holds that since it merely supplies products and services to local telcos, it is not itself a public utility subject to the 60:40 rule. It’s no different from Nokia or Samsung providing phones for promos of Smart, Globe or Sun. The latter three are telcos that must be majority Filipino owned; the first two are merely foreign suppliers and so are not required to be Filipino. Zed does not deal directly with mobile customers. It had dabbled for a while in push messaging, like local telcos and other content providers, but has since withdrawn with the issuance of NTC rules against spam. Its P370-million revenue in 2006 derived only from services to telcos. Value-added service firms pay Philippine taxes, hire Filipino talents, rent Filipino office space, buy Filipino products, and support Philippine industries.

Still, if the NTC rules that Zed must open up to Filipino ownership, the Spanish firm might comply, depending on word from Madrid. All it asks is for the NTC to make a decision any which way, so that it can plan whether to expand or fold up. Too, Chikka and IG Inc. would be guided accordingly, If there’s anything a businessman hates, it’s uncertainty. And NTC, with a job not only to regulate but also promote the telecom industry, must keep apace with the private sector.

* * *

Are there no more nominees of integrity that civil society must keep batting for retired Supreme Court justice Jose Melo as Comelec chairman? Melo is 75, and the Comelec chief’s term is all of seven years. He would be 82 by the time he steps down from work that, given the depth to which the poll body has sunk, can sap even a young man’s energies.

Nominators say they consider not only integrity but capability as well. If so, they need to check not Melo’s proven leadership skills but physical endurance for a backbreaking job, given his age.

Melo has had a distinguished career as jurist and public servant. He is the type who would never say no when asked to serve the country. But at 75, Filipinos owe it to him to let him enjoy retirement with his family.

Sistemang halalan repormahin muna

SAPOL Ni Jarius Bondoc, Pilipino Star Ngayon, Friday, January 25, 2008

PARA kay Kit Tatad, dating reporter, press secretary at senator, ang media ay lulong sa pagbalita kung sinu-sino ang tatakbo para Presidente sa 2010. Pati ‘yung isyu kung puwede kumandidato muli si Joseph Estrada ay labis raw ibinabalita. Mali raw ang mga usaping binibigyan-pansin ng media.

Sa dakong pulitika naman, lulong ang oposisyon sa pagpapatalsik kay Gloria Arroyo. At abala naman ang administrasyon sa pagkapit sa poder. Nauubos lang daw ang sigla ng magkabilang panig sa guniguni.

Samantala, patuloy na naghihirap ang masa. Hindi magkasundo ang pamunuan sa solusyon. Parang panahon nina Rizal at Bonifacio, ani Tatad, tinatanong ng mga intelektuwal kung reporma o rebolusyon ang dapat.

Narinig daw niyang magpaliwanag si dating South African president Frederik de Klerk kung paano nila wina­kasan ni Nelson Mandela ang pag-aalipin sa mga Itim. Simple lang aniya ang sagot ni de Klerk. Nilagay daw niya ang sarili sa kalagayan ng kabilang panig at inintindi kung bakit ninanais ng kalaban (sina Mandela) ang kung ano mang pakay nito.

Ani Tatad, dapat tularan ang ehemplo nina de Klerk at Mandela na imbis na magkatayan ay nag-usap at nagka­sundo sa mga hakbangin. Maaari raw umupo ang admi­nistrasyon at oposisyon para ilatag ang mga tiyak na kapwa nilang nais na pagbabago.

Isa sa tiyak na pagkakasunduan nila ay reporma at paglilinis ng sistemang halalan. Ehemplo, ani Tatad:

• Batas na magpapairal sa pagbawal ng Konstitusyon sa political dynasties;

• Batas sa pagtustos ng Estado sa kampanya ng mga kandidato, para patas ang labanan at walang kikilan kapag nanalo na;

• Batas para otomatikong resigned na ang isang sena­dor na sa gitna ng termino ay tatakbo bilang Presi­dente, Bise, o ano pa mang posisyon;

• Batas na magpapadali sa recall ng isang popular na kandidato na naging imoral o walanghiya; at

• Bagong sistema sa pagboto at pagbilang upang bumilis at luminis.

Telecoms experts discover NBN price discrepancies

GOTCHA, Published in The Philippine Star, Wednesday, January 23, 2008

Telecoms men are proving to themselves that the national broadband network contract was grossly overpriced. Comparing the price quotations of favored supplier ZTE Corp. with prevailing industry rates, experts add up the overpricing to almost $200 million. This upholds earlier exposés of irregularity in the award of the deal by the Dept. of Transportation and Communications in April 2007.

In one such contrast, technologists noted overpricing of P98 million in equipment and P99 million in services, for a total rip-off of P197 million. It is more than half of the contracted price of P329,480,941. The study has been submitted to the Senate (see table). Similar studies are underway.

Three Senate committees had subpoenaed the contract and annexes, and ZTE demanded confidentiality of proprietary info. The tri-com turned it down for transparency in public transactions, and issued the documents to the press. Telecoms specialists in turn browsed newspaper websites to compare ZTE/DOTC prices with known industry rates.

In Equipment, the first major incongruence was the ZTE/DOTC price of $47,649,037 versus the industry estimate of only $12,000,000.

Also sticking out is the price for WiMax, the microwave system that transmits wireless data over long distances. The contract stipulates 300 WiMax sites. Taking out the modules, telecoms reviewers divided the balance of $27,236,577 by 300, and came up with about $90,000 per site. The usual cost of a site is only $35,000 to $40,000, depending on configuration. The ZTE/DOTC price is 2.3 times higher than industry rates.

The WiMax CPE cost of ZTE/DOTC totaled $54,840,968 for 25,844 units, or about $2,122 apiece. This is again way above — about seven times more than — the industry average of $300 to $400.

In all, the Equipment discrepancy was between ZTE/DOTC’s $194,051,628, versus industry estimates of $96,078,246.

In the Services apparently were hidden the “soft monies.” Site preparation of $48,571,040 was quoted by ZTE for the 300 sites (80 greenfield, 150 rooftop, 70 co-located). This comes up to about $161,000 per site. The industry average is only $40,000 per. This shows the ZTE/DOTC price to be four times the usual.

Engineering and Management Services in all ran up to $118,695,527 — or 36 percent of the total project cost. At 300 sites, this translates to $395,652 per site, before equipment costs come in. But industry rates range from only 10 to 15 percent of total project costs. Assuming the higher ratio of 15 percent, then the ZTE/DOTC price was 2.4 times the usual.

The discrepancy in Services was ZTE/DOTC’s $135,429,313 against an industry average of $36,733,786.

ITEM	ZTE/DOTC	INDUSTRY
Equipment
A. Transmission Backbone	$ 47,649,037	$ 12,000,000
DC Power & Gen Set	11,505,187	11,505,187
Information Security System	6,743,012	6,743,012
Monitor & Environment	3,532,877	3,532,877
Network Mgt. System	2,143,540	2, 143, 540
IP Backbone	15,510,251	15,510,251
Subtotal	87,083,904	51,434,867
B. Regional WiMax
Data Bridge Outdoor Module	4,186,728
CPE Outdoor Radio Module	46,105,696	7,753,200
Baseband cable	4,548,544
Others	27,236,577	12,000,000
Subtotal	82,077,545	19,753,200
C. VoIP
CPE	3,876,600	3,876,600
Others	11,299,287	11,299,287
Subtotal	15,175,887	15,175,887
D. Data Center/NOC	8,977,882	8,977,882
E. Freight	649,636	649,636
F. Transport Insurance	86,774	86,774
Subtotal	736,410	736,410
Total	194,051,628	96,078,246
Services
Site Preparation & Civil Works	48,571,040
System Implementation & Engineering	20,607,490
Site Engineering for Remote Office Sites	28,686,490
Project Mgt Office	5,955,000
Managed Services	14,875,507
Subtotal	118,695,527	20,000,000
Services for IDC Construction & Integration	8,287,281	8,287,281
Link Charges (3 years)	6,498,000	6,498,000
Training	1,948,505	1,948,505
Subtotal	16,733,786	16,733,786
Total	135,429,313	36,733,786
Total Project Cost	329,480,941	132,812,032