EDITORIAL — Regulating ODA projects

As the investigation continues into the $329-million national broadband network deal, concerned parties should also focus on ways of improving accountability in the utilization of foreign aid.

The broadband deal, signed by ZTE Corp. of China with the Department of Transportation and Communications last year, was initially supposed to be a build-operate-transfer project to be undertaken by Joey de Venecia’s Amsterdam Holdings, with ZTE getting the supply contract.

For still unexplained reasons, the entire project, with the price supposedly higher by more than $100 million, was awarded to ZTE, no longer as a BOT project to be undertaken by the private sector, but as a government-to-government project to be financed through a loan from the Chinese government. De Venecia was eased out, reports of an overprice came out, he was summoned by the Senate, and the investigation of the scandal continues.

Even if criminal and administrative charges are filed in connection with this controversy, similar incidents are bound to occur unless safeguards are in place to prevent the misuse of official development assistance. If there is truth in the allegations in the NBN deal as well as in anomalies reported in connection with other ODA-funded projects in the recent past, such projects have become prime sources of kickbacks. Like the NBN deal, the necessity of several of those projects is also questionable. Procurement policies are set aside when it comes to ODA projects, and there is little oversight in the way the executive branch utilizes foreign aid.

This is a window of opportunity for corruption that lawmakers and other concerned parties must close. Donor governments can be brought in for their ideas on how they can maintain control over the way their aid will be utilized without opening opportunities for corruption, and without making decision-making in project implementation hostage to Philippine politics. ODA is not all in the form of outright grants; it can be a loan that must be repaid using public funds, which warrants proper oversight. Many of the major development projects have a foreign funding component. The country cannot afford to have these projects compromised because of corruption.