Multiple plunder complaint filed vs Noli, contractors over Smokey Mountain project

MANILA, Philippines - A lawyer of former informal settlers in the Smokey Mountain dumpsite has filed a multiple plunder complaint against Vice President Noli de Castro, chairman of the Home Guaranty Corp. (HGC) and National Housing Authority (NHA), and officials of contractor R-II Builders Inc. in connection with the alleged P4.4-billion midnight deal for the Smokey Mountain Reclamation and Development Project (SMRDP).

Lawyer Roderick Gabrillo had earlier exposed the alleged deal between the NHA and R-II Builders, with the government unnecessarily paying P1.84 billion to R-II Builders.

Gabrillo said there is still culpability among the people who laid the groundwork for the signing of a memorandum of agreement with R-II Builders, owned by businessman Reghis Romero, even if the deal was not signed as scheduled last Friday.

He said if signed, the MOA would have entailed NHA paying the contractor P4.469 billion.

Among those charged were board members of the NHA and the HGC and R-II Builders owner Reghis Romero and son Michael.  

Gabrillo claimed that of the P4.469-billion payment of the NHA, P1.83 billion would go to R-II Builders, despite its failure to fulfill its obligations when it assumed the P6-billion project.

“If this was not stopped, billions of pesos of government money would have been wasted in this project,” Gabrillo said.

He said paying P1.84 billion to R-II Builders was anomalous considering the revelations earlier made on its failure to deliver on its obligations under the joint venture agreement with the government forged during the time of former President Fidel Ramos.

The lawyer noted that due to insufficient funds, R-II Builders had to borrow from government financial institutions such as the Philippine National Bank (PNB), Social Security System, Government Service Insurance System, Overseas Workers Welfare Administration, Land Bank of the Philippines, among others.

These loans, he added, were all guaranteed by the HGC.

The SMRDP had been branded by Sen. Miriam Defensor-Santiago as one of the highly anomalous projects undertaken during the administration of former President Fidel Ramos.

Santiago said the joint venture agreement between the NHA and R-II Builders in implementing the SMDRP was unconstitutional.

She said a component of the 79-hectare reclaimed land near Manila North Harbor would be transferred to R-II Builders, also the builder of a low-cost housing program, to expand Smokey Mountain, the former dumpsite in Tondo, Manila.     

Santiago explained that the joint venture agreement should have been rescinded because it turned out that government institutions financed the project at a cost of P3.1 billion.

Under the Smokey Mountain Asset Pool Formation Trust Agreement, which raised over P3 billion for the controversial project, the PNB as trustee has custody of titles and documents related to the contract.

Another case was also filed before the Ombudsman against De Castro, NHA general manager Federico Laxa, and HGC president Gonzalo Benjamin Bongolan on SMDRP.

In an 11-page taxpayer’s suit, former newspaper columnist Ligorio Naval said De Castro, Teves, Laxa, and Bongolan violated the Anti-Graft and Corrupt Practices Act by entering into the questionable MOA and a Compromise Agreement (CA) with R-II Builders.

The complaint dubbed the twin documents as mere “cover-ups intricately woven, devised and meticulously designed to conceal a grand scam, which have caused substantial and undue injury to the government.”

The documents are yet to be actually signed by Laxa and De Castro as ex-officio vice-chairman, Teves as ex-officio chairman, and Bongolan as president, all of HGC.

Naval, however, argues that since the MOA and the CA were sent to Malacañang to endorse the release of P4.47 billion to Romero, the twin deals are already approved in principle.

“Simply stated, it is a done deal or a ‘fait accompli,’ an action which is completed before those affected by it are in a position to question or reverse it,” he said.

Another case

Senate Minority leader Aquilino Pimentel Jr. urged incoming President Benigno “Noynoy” Aquino III to review and if possible rescind the contracts entered into during the administration of President Arroyo, including the controversial deals between Subic Bay Metropolitan Authority and the Harbor Center Port Terminal Inc. (HCPTI).

“Not only review but rescind contracts with any and all persons of firms that have dubious intent in forging last minute agreement with outgoing administration other than public interest,” Pimentel said.

He said the review should provide clues or evidence of wrongdoing like overpricing, violation of transparency contract requirements or agreeing to grossly disadvantageous terms.

Among the controversial deals of the outgoing administration is the impending joint venture deal between the SBMA and the HCPTI.

He said a case had already been filed before the Ombudsman on the joint venture agreement that will give Harbor Center the right to exclusively manage and operate all existing usable ports and wharves at the Subic Bay Freeport Zone.

In the criminal and administrative complaints, the Subic Seaport Terminals, Inc. (SSTI), one of the oldest and biggest Subic cargo operators at the Freeport, said the SBMA gave the HCPTI “unwarranted benefit through inexcusable gross negligence” and entering a contract “grossly dis-advantageous to government,” both in violation of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.

The first case was filed by Amerasia International Terminal Services, Inc. weeks earlier.

Amerasia’s case was recently found to have merit and was assigned case numbers under criminal and administrative cases.

It accused SBMA of violating the RA 3019 and Article 186 of the Revised Penal Code on monopolies and restraint of trade for signing “anomalous” joint venture contract.

The SSTI, in its complaint affidavit, gave financial details of the deal.

It said the HCPTI’s fix revenue commitment to SBMA of $500,000 (P23 million) for the first year is $340,000 short, and way below the revenues that the latter receives from its locators.

In 2009 alone, it said the SBMA received total revenue of $837,398.41 (P38.5 million) from existing cargo operators.

The SSTI added there is an unnecessary sharing of revenues by SBMA to HCPTI to the tune of $337,398 or roughly P15 million. 

SSTI legal counsel Julius Raboca said the SSTI is also convinced that the non-Subic operator is an unqualified proponent, track record-wise and financially.

“Harbor Center has not met the technical qualifications of the National Economic and Development Authority (NEDA) for a private sector joint venture partner as it has not even completed a similar or related project in the past. Although most of its concession rights involve cargo handling, it is common knowledge within the industry that the center only hires subcontractors to perform its cargo handling activities. It has neither manpower nor equipment to handle cargo,” said Raboca.

The Subic Bay Freeport Zone has long been known to have world-class, pristine port facilities. It is one of the cleanest and most modern in the country.

Review midnight deals

The women’s group Gabriela also called on Aquino to review the anomalous contracts of the outgoing Arroyo government, particularly the SMRDP.

“It is a shame for the outgoing administration to sneak a memo-randum containing P4.4 billion for the benefit of corrupt government officials and profit-greedy corporations,” said Lana Linaban, secretary-general of Gabriela. — Rainier Allan Ronda, Perseus Echeminada, Delon Porcalla