POSTSCRIPT / May 8, 2003 / Thursday


Philippine STAR Columnist

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If you like JDV, go along with ConAss

GOOD OR BAD NEWS?: Many people think the move to amend the Constitution and change our presidential system to a parliamentary setup will not prosper anyway, so they do not pay attention.

We’ve got news for them. The move to introduce charter changes via a Constituent Assembly (ConAss) to be convened before yearend has been virtually approved in the House of Representatives and is on its way to concurrence by the Senate.

The rough plan is to convene the senators and the congressmen as a self-appointed Constituent Assembly, rush the amendments — notably the shift to parliamentary government — and submit them for the people’s approval simultaneously with the May 2004 election.

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SURER, CHEAPER ROUTE: You will understand all that maneuvering if you consider that Speaker Jose de Venecia’s obsession of becoming Head of Government can be realized only if we shift to a parliamentary system.

De Venecia is a good man, a consummate politician, and he might just be the answer to our national problems. But he knows that he can never be President in our present setup where the Head of Government is elected directly by the people.

But, he also knows that in a parliamentary setup with the Prime Minister elected by members of Parliament and not by the people, he has an excellent chance of becoming the Head of Government with a mainly ceremonial Chief of State (President).

Based on his rich experience, it is easier — and much cheaper — to herd a majority of about 200 consenting members of Parliament than garnering a majority or plurality of some 30 million voters at large.

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NOT FAIR, BUT TRUE: We know this is not a fair thing to say, both to the gentleman from Pangasinan and other reformist individuals sincerely pushing constitutional amendments in the national interest, but it’s true.

We are ourselves for rewriting our verbose charter and putting in more checks on the excesses of politicians, but the reality at this point is that if you remove our favorite Speaker from the ConAss picture, the campaign will grind to a halt.

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CONSISTENCY: We hold the Supreme Court in awe and utmost respect. As the final arbiter of legal disputes, its word is the highest law in this jurisdiction.

Above and beyond the tribunal, no appeal is legally possible when its decisions on questions brought before it become final and executory.

But having followed the meanderings of the Davide Court as it heard and decided high-profile cases, we cannot help sometimes feeling confused, if not dismayed. In a few instances, we have noted some inconsistencies in its decisions on cases founded on similar facts and circumstances.

A human institution like a court, even if it is the Supreme Court, may be wrong at times. But it should at least be consistently wrong on the same premises so as not to be caught in contradictions. Inconsistencies do not help make the judiciary credible.

Better still, it should shed its claim of infallibility, admit errors if any, and correct them with dispatch.

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FATALLY FLAWED DEAL: Confusion again surfaced with the handing down of a decision voiding the $600-million government contracts with the Piatco consortium for the construction and operation of Naia-3 (Terminal 3 of the Ninoy Aquino International Airport).

Lest we be misunderstood, we clarify at the outset that we do not question the tribunal’s bottom-line ruling that the Piatco contracts should be voided for being in violation of law.

As pointed out in the decision, handed down by a majority en banc vote of 10-3-1, the contracts were shot through with violations, rendering them void from the very start. The court had no recourse but to void the deal, regardless of the commercial implications.

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WHAT ABOUT JANCOM?: But we noticed that in an earlier case where the issues were more or less the same or similar, the Supreme Court rendered an entirely different decision. We refer to the $377-million Jancom contract for the disposal of Metro Manila garbage.

Jancom here refers loosely to the Australia-based Jancom International Pty that won the deal and the local Jancom Environmental Corp. that signed the contract. (We heard there is now a dispute as to which of the two firms should get the business.)

The Jancom garbage case has been thrown back to the Pasig Regional Trial Court, where it now languishes after the Supreme Court ruled that the contract is valid, although not yet enforceable because it lacks the signature of the President.

To cure the defect, the contract has been sent to Malacanang for the President’s signature, but President Arroyo reportedly has been avoiding contact with the papers like they carried the dreaded SARS coronavirus.

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COMPARE THEM: Take a look at the comparative data below culled from the parallel BOT deals of Jancom and Piatco, and draw your own conclusion.

  1. On the issue of violation of the BOT (Build-Operate-Transfer) Law:

In the Jancom case, the firm had no financial capability and did not file a bid bond. The deal did not have the required NEDA-ICC approval, much less the nod of the President. Neither was there an approval from the MMDA Council. The bids and awards committee declared a failed bidding, but somehow the papers kept moving.

In the Piatco case, PairCargo, the predecessor of the Piatco consortium (the Cheng Group and Fraport AG of Germany), was found by the court to have had no financial capability in the first place.

The Supreme Court’s decision? Despite six violations of the BOT Law, the Jancom contract was declared valid, but not enforceable because it was not signed by the President. On the other hand, the Piatco deal was declared null and void, because of one violation involving financial incapability.

  1. On the issue of monopoly and violation of Article XII, Section 19, of the Constitution:

In the Jancom deal, the bid was for 3,000 tons of garbage out of the daily waste of 6,000 to 8,000 tons generated by Metro Manila. The favorable SC decision effectively granted Jancom a monopoly, even beyond the 3,000 tons, by preventing MMDA from contracting other parties for the balance of 3,000 to 5,000 tons. This prevents MMDA from solving Metro Manila’s garbage problem, in violation of the Constitution and in disregard of the public interest, as well as the protection of the environment.

In Piatco, however, the SC decision stated that the rights of service providers operating in the old Naia-1 should be respected and due regard must be given to the rights of third parties and, above all, the interest of the public against a monopoly.

The SC decision on the issue? The Jancom deal was declared valid, effectively granting Jancom a monopoly. But in Piatco, the SC said the contracts were null and void, citing the need to protect Naia-1 service providers.

  1. On the deviation from the bid terms:

In the Jancom deal, the BOT contract deviated from the original project, as follows: (a) Tipping fee was increased by 490 percent from US$10 per ton to $59 basic, and effectively increased by 800 percent to $90 per ton because of hidden costs, and (b) project cost was raised by 142 percent from $156 million to $377 million.

The original government guarantee was only for providing the San Mateo site, but the contract was revised to include other government guarantees covered by government undertaking that were not in the original bid terms.

On the other hand, the SC voided Piatco’s 1997 Concession Agreement, because it contained material and substantial amendments that converted the original bid contract into an entirely different agreement.

Some of the substantial amendments: (a) Reduction of the number of fees that should be subject to approval by the Manila International Airport Authority, (b) the Draft Concession Agreement did not give any direct government guarantee, but the 1997 Agreement provided that Piatco’s default on its loans leads to the assumption by the government of the loan liability.

The SC decision was: The Jancom deal was valid despite at least three major deviations from original bid terms, while Piatco’s contracts were null and void despite the deviations in the revised contracts.

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(First published in the Philippine STAR of May 8, 2003)

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