MTPO works to cut cost of rural phone program

The Municipal Telephone Project Office (MTPO) expects to bring down the cost of the "grossly overpriced" multi-billion "Telepono sa Barangay" (TSB) program by as much as 75 percent once it completes renegotiations with foreign suppliers.

This was pointed out over the weekend by Undersecretary for Transportation and MTPO project director Willie Evangelista during the Telecommunications cluster meeting.

Evangelista said that from the original contracts of about $20,000 - $30,000 per line, the current MTPO management is trying to reduce the amount to about $4,500 per line inclusive of a comprehensive fie-year repair and maintenance agreement, with adequate spare parts, that would guarantee trouble-free operations for the entire system.

Since the amount of loans stated in signed memorandum of agreements with the vendors can no longer be reduced, the MTPO is now pushing for amendments on the project design", Evangelista said.

So far, the MTPO has successfully convinced SRTelecom of Canada to cover 2,227 barangays at 10 lines per barangay instead of the original plan of 1,046 barangays at five lines each. The project was given the go-signal by the late Transportation and Communications Secretary Arturo Enrile.

Likewise, two projects approved by then Acting DOTC chief Josefina Lichauco in 1998 are also expected to be revised this month.

Evangelista said that US firm Lucent Technologies is amenable to doubling the lines they have to install and the number of areas to put them up for the same amount stated in the original contract.

Although Lucent has initially started determining the sites, the contract was put on hold while renegotiations are taking place.

Alcatel of France is also willing to change the details of the deal. Thus, from 344 barangays at five lines each, the new design will include 1,202 barangays at 10 lines each.

Similar amendments are also being worked with other suppliers such as Siemens, NEC, Ericsson, Fibercom, Krone, Telemobile, and Heesung.

According to Evangelista, instead of putting up public calling offices (PCOs), which are office-like facilities, MTPO is now asking the vendors to install payphones which is equivalent to 10 telephone lines under the rules of the National Telecommunications Commission (NTC).

Thus, Evangelista noted that while the project seemed to be disadvantageous to the government in the past due to the huge amount involved, it has now become a very viable undertaking that will enable the country to catch up with its neighbors in terms of national telephone density average as well as jumpstart rural telephony long ignored by current industry players.

Evangelista is optimistic that the final contracts will be signed before the agency's life term expires next month.

He added that TSB is a self-liquidating project established at more affordable repayment terms with higher privatization potential within the three-year grace period.

There is also an immediate availability of 100 percent foreign financial with no immediate cash out for the government while normally, he said there is counterpart local funding.

Moreover, Evangelista said that the Philippines could avail of up to 35 percent grant element under the overseas development assistance and could conduct direct negotiations under the tied loan scheme.