POSTSCRIPT / September 9, 2004 / Thursday


Philippine STAR Columnist

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Cleanup can start right in the Palace backyard

PITY THE PEOPLE: It is not enough that the Energy Regulatory Commission computes how much the National Power Corp. has been losing and then, on that basis alone, raises power rates or prices to cover the deficiency.

As we keep saying here, when a business incurs losses, it is not always because of unrealistic pricing. The losses could also be the result of inefficiency, incompetence or some looting going on inside, or a combination of the above.

The ERC should look also into the contributions of these internal factors instead of blithely passing on to captive customers the burden of covering Napocor’s self-inflicted losses.

After slapping the consumer with rate increases to cover losses, the government should not proceed to slap his other cheek by imposing extortionist taxes to help pay outstanding loans of Napocor assumed by the government and passed on to taxpayers.

If the Arroyo administration is sincere, before it forces the people to swallow the bitter pill, it must unmask the crooks in Napocor who brought down this once-royally profitable enterprise and prosecute them to the hilt.

It’s only fair. Maawa naman kayo sa mga tao!

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HOUSECLEANING: While the Arroyo administration appears bent on dramatically reining in government spending and reducing the budget deficit, there are bureaucrats that close to the Palace who seem guided by different agenda.

If documents in our possession are any indication, an office where millions in public funds are routinely lost to graft is the National Printing Office (NPO), an agency formerly under the Office of the Press Secretary but now attached to the Philippine Information Agency (PIA).

The NPO is headed by officer-in-charge Director Ronald Velasco, a protégé of his brother PIA Director Rene Velasco, who by virtue of Executive Order 348 signed Aug. 11, 2004, is now the direct boss of his brother.

EO 348 restructured the government’s communication arm by creating the Office of the Communications Director headed by former PMS Secretary Silvestre Afable and placing under him the presidential spokesman (who has assumed the dual function of Press Secretary), the PIA, and a host of other public and private (sequestered) information media.

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NO BIDDING: Documents furnished by concerned employees showed that the NPO never conducted a bidding for its procurements since January until the third week of August, resulting in government losses, they said, amounting to more than P150 million based on modest estimates.

It appears from the documents that by dispensing with the required bidding, the NPO had procured from favored suppliers some printing materials that were overpriced by as much as 171 percent of prevailing market prices.

A bidding was conducted on the third week of August, the employees said, but was apparently only for show because it did not result in the reduction of prices. They said that the winning bidders were the same suppliers whom Velasco had previously blessed.

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EMERGENCY?: Documents showed that until EO 348 took effect, most of the NPO emergency purchases (represented as “emergency” to escape bidding requirements) were requested and justified by the NPO bids and awards committee headed by a certain Melinda Eusebio and approved by Ronald Velasco.

The idea behind emergency purchases being exempted from bidding is that bidding usually takes time and the materials are needed immediately.

But the employees questioned the “emergency” nature of the NPO purchases since the supplies could be obtained FASTER over the counter in the normal course of business and at costs LOWER than the negotiated prices.

That point alone is enough reason to start an earnest investigation and send some crooks to jail.

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EXHIBHIT ‘A’: To illustrate how the government loses substantial amounts in NPO purchases, the employees gave POSTSCRIPT some papers covering an order (RF 0406-0192) dated June 7 this year, made under a negotiated contract.

The purchase, made from a supplier identified by the employees as the EMBU Integrated & Trading Corp., was for:

  1. One roll of white carbonless paper (CB to sheet, blue image, 66 gsm, 117 kilos per roll) bought for P29,680 per roll when the prevailing price at the time was only P11,395.56 per roll — or an overprice of 160 percent.
  2. Three rolls of carbonless paper (CFB middle sheet, blue image, 60 gsm, 107 kilos per roll) bought for P33,698 per roll when the prevailing price was only P12,431.52 per roll — or an overprice of 171 percent.
  3. One roll of white carbonless paper (CF bottom sheet, blue image, 55 gsm, 117.60 kilos) bought for P26,446 per roll when the prevailing price was only P10,256 per roll — or an overprice of 158 percent.

The NPO paid a total of P157,220 on that purchase when it should have spent only P58,946.12 for the same items. The apparent overprice was P98,273.88.

* * *

COMPARATIVE PRICE: To verify, the employees secured similar purchase documents from a private printing company that had bought — for a much lower price — from the same supplier the same materials that the NPO bought only the previous week.

The employees noted also that the supplier (EMBU) was delivered to NPO only one week after the PO was issued, while the private printer who bought the same materials got delivery on the SAME DAY it sought a quotation from the supplier.

So what emergency are they talking about? This point is relevant, because the excuse made for dispensing with the bidding and resorting to a negotiated sale was that the materials were needed in an “emergency.”

The NPO bids and awards committee wrote a memo to Velasco to secure the latter’s approval citing the urgency of the purchase.

* * *

PATTERN SEEN: To establish what they called a “pattern of corruption,” the employees showed three more purchase orders (RF-04-04-0148 dated April 2, 2004; RF-04-04-0170 dated April 28, 2004; and RF-04-06-0191 dated June 7, 2004) in the amount of P159,880; P250,020 and P1,234,980, respectively.

The employees said that the three NPO purchases, all made though negotiated contracts from only one supplier — Big P General Merchandising Inc. — cost the government P670,555 in overprice.

To prove that, they presented another quotation from the same supplier for exactly the same quality and specifications of paper taken by a private printer.

Showing the quotation, cash invoice, and the official receipt issued by the same firm that supplied the NPO, the employees noted that the NPO bought the same supplies at an overprice ranging from 66 to 80 percent of the prevailing market price.

* * *

TEST OF HONESTY: In this second illustration, the NPO bids and awards committee also cited the same “urgency,” claiming that the government entity needing the supplies — identified as the PEZA — required a delivery time of 15 days upon receipt of the PO.

But, as it again turned out, the same materials bought by the private printer were delivered by the same supplier the very next day it received the purchase order.

The NPO employees have written a letter-complaint to the Ombudsman and the Presidential Anti-Graft Commission, copy furnished the Office of the President, the Press Secretary, and then OP chief of staff Rigoberto Tiglao.

These NPO cases may not be in the magnitude of the mind-boggling scams that rocked the Napocor, the Public Estates Administration and such stinking offices, but they are still a test of the honesty of the anti-graft campaign of the administration.

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(First published in the Philippine STAR of September 9, 2004)

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