BSP reorders passports from disqualified maker

Reports of disintegrating passports are not isolated cases after all. Nor are they a simple matter of bad-quality printing by a Bangko Sentral ng Pilipinas (BSP) subcontractor. It’s a full-blown anomaly.

Here’s the story, according to BSP insiders:

• The Department of Foreign Affairs (DFA) tasks the BSP as its security printer of passports. In turn the BSP subcontracts Oberthur Technologies SA (of Europe) to supply and attach the electronic cover. Embedded in the e-cover is a microchip containing the holder’s vital information.

• For the past four years Oberthur has been charging the BSP $5.72 per e-cover, or P245 in today’s peso. Its local agent SinoPhil Greater Solutions Inc. bagged the controversial deal in 2008. Together with the BSP’s inside pages and administrative costs, an applicant pays P1,200 for a passport with five-year validity.

• With the contract expiring this September, the BSP conducted a bidding last February. Oberthur won against three other bidders, this time with a quotation of only $2.59 (P111) apiece. Why it has been charging the government more than double, when it could give it at such low price, should have been demanded in explanation. It wasn’t. Since the DFA issues about 10,000 passports a month, then the government has lost tens of millions of pesos so far.

• Still the BSP and the DFA could be happy with the price cut. Yet they’re not. For, Oberthur since February has twice failed to meet the BSP’s minimum standards for cloth-paper material and gold-ink printing. The DFA had demanded the high quality due to mounting complaints of e-covers being torn and inside pages coming off. This happens when the holder or immigration officer pulls the e-passports out of the plastic covers that are being sold outside the DFA consular offices.

• With Oberthur’s continued failure to submit acceptable samples, the BSP Bids and Awards Committee last April 23 sent it a Notice of Post-Disqualification. An internal memo a week earlier directed the immediate consideration of the second lowest bidder for Post-Evaluation.

• Meantime, however, the DFA has been complaining of a shortage of 300,000 e-passports as of April-May. A BSP internal memo in April noted that Oberthur has had a production backlog since December 2011.

• In the last week of June the BSP tasked Oberthur to supply the 300,000 e-passports. The contract was billed as “emergency,” meaning, the unit price could even be higher than the present $5.72.

Last week a group of concerned BSP supervisors alerted their bosses about the anomaly. Dossiers also have been sent to the Ombudsman. Accounts are being pieced together to show that the production shortage was deliberate on the part of certain DFA and BSP old-timers. The intention was not only for “emergency” contracting, but also allegedly to favor the present agents, who have connections to the past administration.

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Ramon Gutierrez was replaced as head of the Civil Aviation Authority of the Philippines ten days before marking his second year in office. Naturally the former military pilot-general felt bad. He had promised his appointer Noynoy Aquino to get the country out of the blacklist of international aviation authorities. He even gave himself a deadline of two years to do so. But weeks before that lapsed it was obvious he wasn’t going to make it. So he had to go.

What particularly hurt for Gutierrez was that he thought he was about to win, in overtime of two to three months. By August the UN International Civil Aviation Organization (ICAO) would have audited the Philippines’ compliance with flight safety standards. By the following month the U.S. Federal Aviation Administration (FAA) would have reviewed its Category-2 rating of the Philippines. Gutierrez was confident of passing both. Since he took over the CAAP in 2010, the ICAO and FAA’s 88 negative findings had been pared down to 21. The ICAO lumps the 21 into four issues. All concern the lack of training of CAAP check pilots, tasked to rate their commercial superjumbo-jet counterparts.

At present the check pilots either are full-time CAAP employees who have flown only light planes, or retired, experienced but part-time fliers. Had the ICAO and FAA’s low ratings been upgraded, Europe and Asian countries would have followed suit. No longer would Philippine carriers have to suffer, due to CAAP’s fault, global bans on adding new flight routes or frequencies.

But Gutierrez’s plan will never be tested now. His replacement, ex-Air Force chief William Hotchkiss, first would have to familiarize himself with the blacklist issue. It’s doubtful if he would be able to schedule the ICAO and FAA audits in the third quarter of 2012. He has asked the press for patience, as his first focus would be on the twin headache of corruption in the CAAP. The successive global downgrades of the Philippines, starting 2007, sprang from rackets in airplane, airline and pilot inspection and licensing. Most of the racketeers remain, protected as they are by civil service laws and the protracted process of criminal prosecution.

There are side issues. The CAAP chief would have to swiftly work for the night rating of major airports to unclog the Manila International terminal. He would also have to meet counterparts from other agencies in the transportation department, as well as envoys to the US, Europe, Japan, Korea and Australia who will help him get aviation upgrades.

Meanwhile, general aviation businessmen are grumbling about the government habit of appointing ex-generals to the CAAP. The Air Force is so backward, they say, that its officers are so unversed with modern terminals, aircraft and procedures.

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