POSTSCRIPT / July 16, 2002 / Tuesday


Philippine STAR Columnist

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It’s final: Jancom deal is dead, and rightly so

FASTBREAK FOILED: A spokesman of Jancom Environment Corp. had a piece published last July 12 answering our comments on the firm’s controversial $350-million garbage incinerator deal that, in our view, had all the marks of an attempted high-level fastbreak with no less than Malacanang and the Supreme Court coming into play.

But rather than answer back and in the process repeat ourselves, we asked the Citizens National Network Against Corruption and the Bantay Kontrata (who know the case inside out) to do a rejoinder. Here it is, its facts and message as clear as crystal:

“Jancom is dead. So this letter is probably just good English chasing after bad. However in our country where half-truths, outright lies and sham contracts eat into the very fiber of our society, it is very liberating to know an issue through and through and be able to speak the truth.

“Spin-doctors, lawyers and ‘spokespersons’ be damned. We sat in on all the House hearings where the Jancom ‘contract’ was examined and based on the testimony of the witnesses, we have been able to uncover what really happened.

“Jancom’s original offer to the Philippine government was in response to an invitation to bid for the privatization of the operation of the San Mateo landfill. However, this process lost its purpose and became a sham for Jancom to get its contracts.

“It was maintained as a competitive bid since that was the only process by which Jancom could be given government guarantees.

“In a July 1995 memo to the President, Dionisio de la Serna who had been tasked with privatizing the operations of the San Mateo and Carmona landfills, wrote that he had arranged ‘with the pre-qualified proponents to allow only the [sic] Jancom to bid for the San Mateo site.’

“According to Luis de Alca, as he testified in the Congress hearing, Jancom did not originally have Vivendi as a technical partner. They had a Dr. Frank Lohning who owned the patents to an incinerator that produced electricity. Jancom’s principal, a Jay Alparslan kept Dr. Lohning in the dark about the details of the deal with De la Serna.

“Lohning got to examine the contract a few minutes before signing and to his horror found that the capital expenditure had more than doubled from the $156 million he has priced his equipment at to $379 million. The tipping fee likewise went up from $25 per ton to $59 per ton. Lohning refused to sign the contract and walked out of the deal.

“All this is recorded in the Congress hearing.

“Jancom was able to get an Alarko out of Turkey (not Vivendi yet) to be their technical partner. Just when they thought they had the contract in the bag as the sole bidder for the San Mateo project, Jancom was unable to raise the required bid bond before the deadline. The official minutes of the Pre-Bid Awards Committee (PBAC) meeting state ‘It was then moved and seconded that the Jancom proposal be rejected for failure to post a bid security. The PBAC unanimously passed the motion to reject the Jancom proposal and return all Jancom envelopes.’

“A month after the deadline lapsed and the bidding was deemed failed, De la Serna overturned the PBAC and gave Jancom another two months to post a bond. Jancom was finally able to post a bid bond, but only P79 million, about half of the P159 million required by the BOT law.

“A contract draft was finally presented to the Philippine government some time in 1997. From Alarko, the partner had now changed to Vivendi, who was also supposed to acquire 80 percent of Jancom. Makes you kind of wonder why Vivendi did not bid itself or even come out with a single statement of support in the last few months as the controversy raged.

“NEDA found drastic changes from the terms of reference for the privatization of San Mateo:

  1. Inclusion of three materials recovery and recycling facilities (MRF’s).
  2. Increase in tipping fee from $10/ton to $59/ton with the generated energy selling rate at $0.9/kwh which is higher than the current net avoided rate of P1.36/kwh of the National Power Corp.
  3. The revised project cost of P10.57 billion for the San Mateo component including the MRF’s is 142 percent higher than the approved original project cost of P4.36 billion.

“Victor Ramos, Prospero Oreta, and Dionisio de la Serna signed the Jancom contract themselves in December 2, 1997. They lobbied internally for the approval of the contract on Jancom’s terms, but smarter heads prevailed.

“Executive Secretary Alexander Aguirre wrote the President that the Jancom project was not ripe for approval, saying, ‘a conditional approval will be open to question and will only bring embarrassment to the Ramos Administration.’

“Jancom got even more bad karma in the first year of the Estrada administration. The Clean Air Law was signed into law in 1998. Esther Perez de Tagle and her organization Concerned Citizens Against Air Pollution testified that Jancom had been lobbying mightily to kill this law, which banned all incinerators whether for municipal, bio-medical or hazardous wastes outright.

“Jancom sought to have its technology reclassified by the Department of Environment and Natural Resources as a Thermal Converter Technology. In a letter dated March 16, 2001, the DENR’s Environmental Management Bureau found Jancom’s technology ‘a burn technology similar to incinerating and not in accordance with the laws and regulations.’

“Jancom’s contract should have died in 1999. Residents along the road to the San Mateo landfill held an increasingly heated series of demonstrations until on July 19, 1999, President Estrada declared that the dumping in San Mateo would end on Dec. 31, 2000.

“With the object of Jancom’s privatization deal closed, NEDA-ICC met on Aug. 16, 1999, to declare ‘the non-implementability of the San Mateo and Carmona waste-to-energy project.’

“And with San Mateo and Jancom dead, the Metro Manila Development Authority called another bid which Jancom’s purported partner Vivendi, joined. Vivendi came in second with a tipping fee of $32 per ton for landfill in Zambales.

“With the skills of a lifelong loser, Jancom got a temporary restraining order relying on interesting legal circumventions by the Regional Trial Court to make valid an unsigned contract. Earlier this year, the Supreme Court’s Third Division ruled in favor of Jancom’s contract since the MMDA had filed the wrong kind of motion. The case has never been truly decided on its merits.

“Jancom was dead from the get-go. It was never founded on a proper legal basis and trying to bring it back won’t work, it will just bring out the foulest stench imaginable.”

There. That should be clear enough to reasonable men and those who do not have any pecuniary interest in the Jancom deal.

* * *

ROMBLON RUMBLINGS: Petron, meanwhile, has been reacting promptly to “Sumbong from Romblon” items in Postscript discussing concerns over the putting up of a bulk plant in a residential-tourism-commercial area in the shoretown of Ipil in Romblon.

Reacting to some searching questions posed by Romblon native Nic Musico, Petron’s corporate communications manager Virginia A. Ruivivar wrote to tell us that they would send him their answers to his questions.

Musico, an environmentalist who has been residing in Honolulu for the past 30 years, happens to be a branch chief with the Honolulu Department of Environmental Services.

Petron plans to hold a technical conference on Thursday, July 18, at the site of the bulk plant. They are inviting residents, representatives of local governments and the Department of Environment and Natural Resources.

* * *

PROBE ON QUEZON IPPs: Rep. Rafael P. Nantes of the first district of Quezon, has filed Resolution No. 631 for an inquiry into another “sumbong” from his constituents on the failure of the Quezon provincial government to collect P3 billion in realty taxes from two independent power producers (IPPs) there — Quezon Power Ltd. and Mirant Power Plant.

The non-collection of the taxes with the suspected collusion of some provincial officials was reported (“Read about Quezon’s row with 2 IPPs — and weep!” in Postscript, 30May02) by lawyer Sonny E. Pulgar of the Sentro ng Agapay Legal sa Quezon.

It seems illogical that while some provinces, such as Quezon, host major IPPs feeding the national power grid, their residents pay for electricity at rates higher than the national average and hardly reap the benefits of affordable electricity.

Nantes lamented in his resolution that while provincial officials, particularly the governor, should press collection of the P3 billion from QPL and Mirant, they “appear to be colluding” with the IPPs and their collection effort “has been found most wanting.”

* * *

(First published in the Philippine STAR of July 16, 2002)

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