POSTSCRIPT / September 23, 2007 / Sunday


Philippine STAR Columnist

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Refocus NBN inquiry to feasibility, urgency

MAIN FOCUS: The Senate hearing in aid of legislation on the $330-million National Broadband Network project has been traipsing around it, focusing on middlemen and fixers but hardly on its basic features.

Lawmakers should devote more time to looking at how the pertinent laws can be improved. Investigation of possible graft is best left to investigative and prosecutory agencies unless senators want to play detectives.

Key questions many of us taxpayers want answered are those on the feasibility, urgency and affordability of the NBN project awarded to the Chinese firm ZTE Corp.

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DISTRACTION: After we dragged out for public flogging First Gentleman Jose Miguel Arroyo, Comelec Chairman Benjamin Abalos, Communications Secretary Leandro Mendoza and the usual suspects, what?

Will the flurry of accusations and denials improve the feasibility, urgency and affordability of the project by way of legislation to be introduced by the Senate investigators?

Even if some or all of the big shots mentioned may stand to benefit materially from the project, their prosecution, if warranted, is a task of other agencies, certainly not of the Senate.

Unless the Constitution was rewritten while I was asleep last night, the senators’ function is still legislation, not prosecution. They should not be distracted by the quarrel, and the griping, of bidders and fixers.

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BALANCE: Media reports on the Senate inquiry have not drawn yet the complete picture, but my early impression — which may be unfair — is that the terms of reference should be revised and the project bid out again.

So far we have been treated only to the griping of the businessman-son and namesake of House Speaker Jose de Venecia Jr. who wants us to believe that his firm Amsterdam Holdings Inc. had been cheated of the contract.

For balance, we should look at other details that did not get media emphasis in the competition to peddle the most lurid scandal story.

(A complaint, btw, has been filed with the House against the Speaker for alleged violation of several laws, plus the Constitution, by sitting there and allowing his son to apply for and win a legislative franchise and then using his influence to gain business advantage.)

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UNDERCAPITALIZED: One question glossed over in the excitement of the inquiry was if AHI could have been a serious contender for the NBN project had Joey not been the son of the Speaker.

As Joey griped about the alleged overpricing by ZTE, everybody seemed to have lost sight of whether his own firm, AHI, was qualified to take on the massive project in the first place.

Secretary Mendoza testified that, based on available records, AHI had an authorized capital of P5 million, of which only P312,000 was paid up.

Joey tried to correct this “mistake” when, upon questioning by Sen. Joker Arroyo, he informed the Senate that his “paid-in” capital was not P312,000, but P25 million.

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GROSS DISPARITY: But Arroyo pointed to the “gross disparity” between AHI’s paid-in capital — assuming that it was indeed P25 million and not just P312,000 — and the cost of the NBN project that he said could be about $300 million to $400 million.

“With a P25-million capital, how can you implement a P12-billion deal?” Arroyo asked Joey.

Sen. Juan Ponce Enrile wondered aloud whether the government would even have listened to Joey’s proposal, given the “thin capitalization” of AHI, had not the Speaker been his father.

Moreover, Enrile pointed out that while Joey was actually the driving force behind AHI, Broadband Philippines, and Multimedia Telephony Inc., he had never appeared on paper as the owner of any of these companies.

* * *

SUBMERGED: The Speaker’s son said that AHI (actually an investment and not a telecommunications company) was already incorporated when he came in — another way of, as Enrile put it, “submerging the ownership identity” of his firms.

Joey explained that he had to “submerge” his identity in these companies to gain some “flexibility.” He added that, “Once I know eventually what I want to do, then that’s when I come in and put my name as the shareholder on record.”

Enrile said that such practice would have been understandable if Joey were an “ordinary businessman,” which he is not because he is the son of the Speaker, even if he claims to be independent from his politician-father.

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AVOIDING GRAFT: The point of Enrile seemed to be that Joey had tried to “conceal” his involvement so he could bag government projects without being inconvenienced by the provisions of RA 3019 or the Anti-Graft and Corrupt Practices Act.

That law bars relatives of high-ranking officials, up to the third-degree of consanguinity, from getting involved in government contracts. That includes relatives of the Speaker, during whose term his son’s firms had been awarded congressional franchises.

Joey tried to defend his “thinly capitalized” company by saying that AHI would have started looking for capital had it been awarded the NBN contract.

But Arroyo, who had served as chairman of the Committee on Public Services, said the panel frowned on companies using their franchises or contracts as leverage to raise capital.

* * *

BLEEDING BOT: Speaker de Venecia has been saying that if the NBN project were contracted under a BOT (Build-Operate-Transfer) scheme, the government would not have to spend a single peso.

He may be the father of the BOT law, but the facts do not jibe with what he says. There are BOT projects that have been sucking billions from the government to keep them going.

One example is right there on EDSA. The Metro Rail Transit is being subsidized by public funds despite the BOT contract of its investors to build, operate and turn it over to the government after the agreed term.

The Speaker better not tell us also that there are no middlemen, mystery men, fixers, golfing cronies and commissioners in BOT projects.

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(First published in the Philippine STAR of September 23, 2007)

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