Underhanded

We know we have a large infrastructure gap that hampers the ability of our economy to grow and, consequently our ability to lift our people out of poverty.

We are trying to close that gap — although at an excruciatingly slow pace. Sometimes it seems we might be able to close our infrastructure gap only at the end of a century that has just begun.

The slower we are at closing the infrastructure gap, the more economic opportunities we lose. The more Filipinos will be trapped in poverty. The more we will lag behind our neighbors.

It is always easy to blame a slow bureaucracy for the excruciating pace with which we are moving to close the infrastructure gap. Many key infra projects involve large contracts and require a high degree of engineering skills to evaluate. There are times our bureaucrats feel they are not up to the task — or else, they just let the grand plans sit and gather dust, afraid of getting embroiled in controversy.

In addition to the reluctance or incompetence of ordinary bureaucrats, there are other factors that get in the way of a more rapid response to meet our infrastructure needs. The easiest way to get things done is, of course, to invite the private sector to invest in infra. For those things government has to do itself, financing is often a problem considering we operate with what seems like a chronic deficit.

In many cases, government needs to borrow to meet urgent infra needs. When we do, or when large projects actually do get awarded out, the projects become magnets for political controversy. Remember the great controversy surrounding the national broadband project.

We all know this: when bidding procedures are undertaken, losers often run to court to stop the award of projects. Sometimes, contracts already signed are eventually abrogated by courts. At other times, temporary restraining orders are acquired by losing bidders simply for the sake of making things difficult for bidders who won.

Even when bidding procedures are scrupulously observed and where full transparency is ensured, losing bidders still try to smear the process by spreading disinformation or peddling intrigue. It is part and parcel of what we normally call the “crab mentality” that pervades our damaged culture.

An outstanding example of this is currently underway in the case of the Communications, Navigation and Surveillance/Air Traffic Management (CNS/ATM) project supervised by the DOTC. For years, our air management system has been run using obsolete technology. That is the reason the safety of our airports has been downgraded by international civil aeronautics authorities — a matter that adversely affects our ability to attract tourists.

The problem of obsolete air traffic management and airport security has been recognized for years. On March 28, 2002 — or almost eight years ago — we successfully negotiated a loan to undertake modernization of our air traffic management system. The loan will be provided by the Japan International Cooperation Agency (JICA) under Loan Agreement no. PH-P228.

Armed with JICA financing, it still took our bureaucracy all these eight years to do the bidding process — notwithstanding the peril to the safety of our air passengers posed by our obsolete air traffic management system.

What has been completed so far is the pre-qualification of bidders. The pre-qualification process involves evaluating the financial capacity of the prospective bidders to undertake the project. The first phase of the project costs $70 million. Of that project cost, the bidder is required to demonstrate capacity to raise $22 million, which is their share of the cost.

One joint venture between a Japanese firm and an Australian company was pre-qualified. Another joint venture between one Japanese firm and its Italian partner failed the pre-qualification stage because while the Japanese firm had the ability to share its part of the finances, its Italian partner could not show proof of financial competence. Yet another large Japanese conglomerate was also shunned because of failure to demonstrate financial capability.

The disqualified bidders are now going around town spreading the word that the pre-qualification procedures were meant to favor a Japanese company. That strikes the informed observer as odd: all the potential bidders involved Japanese firms. The two joint ventures struck out because of questionable financial competence both involved Japanese firms.

The disqualified bidders are complaining about JICA’s involvement in the pre-qualification procedures. They must have intentionally overlooked the fact that the agency’s involvement is specified in the loan agreement. Since JICA is lending us the money at very friendly terms for this urgent upgrade of our air traffic management, they have every right to oversee the execution of the project.

The disqualified bidders are now demanding that the first and second phases of the project be bundled together and bidded out as one. The second phase costs $200 million. If the two phases are bundled together, the bidders disqualified because of weak financial competence would be even more disqualified.

The DOTC maintains that the two phases of the project are complementary. The firm that wins the first phase enjoys no distinct advantage in the bidding for the second phase. The sourgraping losing bidders are painting themselves into an absurd corner.

Eight years in the works, we should move with some haste in doing this upgrade. Public safety demands it. We cannot possibly be competitive as a tourist destination if our air traffic management is deemed substandard.

So far, the rules have been clear and the process transparent. The losing bidders should not use underhanded tactics to throw a monkey wrench into the process in pursuit of their selfish interests.