Another scandal

It seems the Department of Transportation and Communications (DOTC) has a lot of explaining to do so as far as the prequalification of bidders for its new communications, management and surveillance /air traffic management (CNS/ATM) systems development project is concerned.

The CNS/ATM project is aimed at improving the safety, reliability, and efficiency of the air traffic system in the Philippines. It consists of two phases to be bid out separately, Contract Package I worth about $70 million and Contract Package II costing around $120 million.

Sojitz Corp. and Sumitomo Corp.-Thales Australia Ltd. were prequalified for Package I, while there were three groups prequalified for Package II- the Sumitomo-Thales, Selex Sistemi Integrati- Kanematsu Corp., and Marubeni Corp. Selex-Kanematsu and Marubeni were disqualified from Package I.

What’s puzzling observers is the fact that the two packages had to be bid out separately when the project is one and the same and the two packages are interconnected. The software for Package I has to work with that of Package II. In addition, whoever gets Package I will have an undue advantage to get Package II since the bulk of the expensive software it will be using for I will be needed for II. Therefore, those prequalified under I can afford a much lower bid for II.

Given this, observers say the bidding scheduled next week will likely result in the Sumitomo-Thales joint venture, the only party common in I and II, winning.

There are speculations that JICA, which is funding the project via an untied loan to the Philippines, may be favoring Sumitomo-Thales, considering that it was the Japanese funding agency that disqualified Selex-Kanematsu and Marubeni for a particular item that wasn’t even required in the first place.

The question being raised right now is why disqualify other potential bidders for flimsy reasons and disregard the fact that Thales is the former Thompson CSF that was blacklisted in the Philippines for reneging on a contract with the DOTC in 1998 for the purchase of a global maritime distress safety system (GMDSS). Senator Mar Roxas earlier called for an investigation of the said deal, saying that the system could have avoided the string of maritime disasters in the country and that Filipinos could still be paying for the P793 million loan from the French government that was supposed to finance the GMDSS despite the non-delivery.

Waste of resources

Those criticizing the Subic Bay Metropolitan Authority’s acceptance of Harbour Centre Porter Terminal Inc.’s (HCPTI) unsolicited proposal to rehabilitate and operate five small ports inside the former US naval facility for 25 years should put their money where their mouth is.

HCPTI’s proposal is now up for a Swiss Challenge, which means those interested to undertake the project only have to come up with a better offer until the end of the month. If HCPTI cannot match the challenge, then it goes to the challenger.

The problem is, those critical of the Swiss Challenge may be the same people who have been lording it over Subic Freeport for decades now and have not introduced new and modern facilities needed to spur trade in the area.  

HCPTI has committed to remit to SBMA a guaranteed income of $32 million over 25 years, or $1.2-$1.3 million a year. SBMA would likewise have a share of 15 to 20 percent of total port revenues each year during the life of the contract. Harbour Centre’s proposal is a far cry from the current cargo handling operations where SBMA is earning less than P20 million a year plus a revenue share of 10 to 15 percent a year. HCPTI

The locus of development is the Naval Supply Depot (NSD), which HCPTI wants to develop into a port that can handle bulk and break bulk cargo.

Detractors have been saying that the initial agreement between SBMA and HCPTI would lead to a monopoly in the cargo handling operations in SBMA but they miss the point completely.

For nearly the past two decades, locators/cargo handlers have failed to make Subic the magnet for progress and development in Central Luzon and HCPTI has taken the cudgels to make the wheels of progress turn. NSD is underdeveloped since its turnover on Nov. 1992.

For so many years, the existing cargo handlers in SBMA have not undertaken a comprehensive development plan for their facilities, limiting themselves to simply handling fertilizers and other agricultural inputs along with imported logs and lumber. The cargo handlers in Boton, Rivera, Alava and Bravo ports never took it as their duty to improve the ports.

This is unfortunate considering that SBMA ports could bring in more revenue, intensify foreign trade and even make all industrial and commercial enterprises in Central and Northern Luzon benefit from the low tariffs offered by the authority.

Inspite of this, SBMA has given assurances that existing contracts would be respected, though the authority has emphasized that existing cargo operators have no exclusive rights to operate in the port.

It’a a ‘love affair’

Party-list group 1-Utak, representing the transport sector, wants Energy Secretary Angelo Reyes to represent it in Congress in the event of the group winning in the May elections. 

1-Utak choosing Reyes did not come at all as a surprise. After all, he has worked with the transport sector, first in his capacity as DILG secretary, then as DENR head, and now as energy secretary.

As DILG chief, Reyes cracked down on kotong cops and traffic enforcers. He also waged war against operators of colorum vehicles and went down hard on rogue traffic cops and enforcers.

Meanwhile, as DENR chief, he helped the transport sector in complying with the provisions of the Clean Air Act on minimizing the smoke emissions of their vehicles.

Reyes also initiated moves to help drivers take advantage of cleaner and cheaper fuels such as LPG for taxis, compressed natural gas (CNG) for buses and cleaner diesel for jeepneys.

Despite his hands being tied by the Oil Deregulation Law, Reyes had used moral suasion to convince oil players to give hefty fuel discounts to PUV drivers and vehicles. He also tirelessly brought the oil players and the transport sector together for dialogues.

Of course, there are those opposing Reyes leading 1-Utak in Congress. But the way the party-list system works, the only requirement really is for Reyes to have been proven to have worked for the transport sector he would be representing and, more importantly, that he has the trust of the group.

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