Estrada scraps P53 B worth of rural telecom contracts

Ten contracts totaling P53 billion covering the "Telepono sa Barangay Program" and proposed during the present administration were scrapped on orders of President Estrada yesterday.

Meanwhile, the Chief Executive ordered the re-negotiation of three ongoing projects for the same telephone program, but which were signed during the Ramos administration, after they were found to be disadvantageous to the government.

Executive Secretary Ronaldo Zamora said the 10 scrapped contracts were found to be "overpriced," among other violations.

The program is under the Municipal Telephone Project Office (MTPO), an attached agency of the Department of Transportation and Communications (DOTC).

Mr. Estrada has ordered the Economic Coordinating Council (ECC) to see to it that that government will get the maximum advantage in the three ongoing contracts to be renegotiated.

Zamora told The STAR that the law gives the government the choice to have the contracts rescinded if they are not feasible.

The Chief Executive's action to cancel the 10 newer contracts entered into in his administration based its decision on the findings of the Presidential Management Staff (PMS) Legal Office.

Assistant Secretary Crispin Remulla, head of the PMS Legal Office, said graft charges will be filed in court against government officials who are found to have benefited from these contracts.

The 10 canceled contracts are: TeledataCommunications Ltd. (Ph.3); Heesung Cable Ltd. (Ph.10); Fibercon/ECI (Ph.12); Telemobile Inc. (Ph.4-A); Telemobile Inc. (Ph.4); Alcatel Espana S.A. (Ph.3-A); Ericson Telecom AB (Ph.5); Italtel Spc (Ph.6); Siemens ATEA (Ph.6); and Siemens AG (Ph.8).

Remulla believes that the government's decision to cancel the contracts would not not result in the erosion of confidence among foreign investors.

However, the US and French Embassies called up the Office of the Press Secretary immediately after Malacanang had announced that certain contracts are to be canceled.

American and French companies had participated in the "Telepono sa Barangay Program," which were funded by dev elopment assistance programs from the US and French governments.

Remulla pointed out that any contract entered into in violation of law , public order or public policy shall be void and shall have no force and effect.

"We would have incurred $1 billion in foreign debt if the President had not disapproved these," he said. "What we're saying here is that the telecommunications sector is not reserved for the public sector. We believe that the private sector participation will benefit the country more and more efficiently when it comes to these business ventures."

The 10 contracts were scapped before the MTPO's life is to have ended by law on Feb. 8.

Originally, the MTPO's mandate was to establish a public calling office (PCO) in every municipality in the Philippines. This was later expanded to include barangays that did not have basic telephone service known as the Telepono Sa Barangay (TSB) project. Funding for this program was sourced from official development assistance coming from the US, France and Canada.