Government seeks SGS nod on P6.5-B payment plan

The Arroyo administration is asking the Swiss-based pre-shipment inspection firm Societe Generale Surveillance (SGS) to allow it to pay its unsettled obligations worth P6.48 billion in tranches or installments.

The SGS has billed the National Government about P6.48 billion for services rendered from September 1998, to March 2000.

Finance Secretary Jose Isidro Camacho said government will pay SGS but wants to do so in tranches over a number of years.

"The Department of Finance is negotiating with SGS to spread out the payments over time considering the tight budgetary situation of the National Government," Camacho said.

Camacho said a special task force suggested the payment of P6.049 billion representing 93.35 percent of the original bill.

This was the same team created earlier by then Finance Secretary Alberto Romulo who now serves as Executive Secretary.

The task force, however, said they also recommended withholding just under two percent of total claims or P117.486 million. DOF sources said these deductions were considered disallowances.

Camacho said SGS was willing to waive payment of another P314.127 million, equal to P5.19 percent of total claims, provided some agreement can be reached on the terms of payment.

The Finance chief said the DOF already accepted the final report and is now directing efforts to find ways and means to settle the liability subject to applicable laws and regulations, including the annual appropriations process in Congress. SGS requested the DOF to settle the obligations but the amount was not included in the budget for this year.

The government terminated in March last year, the Swiss inspector’s $100-million annual, 12-year contract and allowed the BOC to take over the pre-shipment inspection.

Camacho however, asked the BOC to review if there was really a need for an inspector.

Government has received proposals from companies, including SGS for pre-shipment inspection services. – Rocel Felix