Foreign funding can be bad for us

Foreign government funding for infrastructure works can be good — or bad. On the plus side, the financing terms are soft: say, two percent per year, for 25 years, with three years’ grace period. On the minus side, however, are situations like this at the new Laguindingan International Airport in Cagayan de Oro City.

Construction is 98 percent finished. It’s time to put in navigational aids. Specifically, the Instrument Landing System (ILS) and the Doppler VHF Omnidirectional Range/Distance Measuring Equipment (DVOR/DME).

Bidding is on August 29 for the supply and installation of the hi-tech gear. The Korean Export-Import Bank is to lend the Department of Transportation and Communication $13.293 million (P561 million) for it.

Only three firms joined the pre-bid conference last August 2 and bought bidding documents at P80,000. All three are Korean: Hanjin Heavy Industries, Seokwang Development, and UbiNS Co. Ltd.

All three are offering the ILS and DVOR/DME of one compatriot monopoly manufacturer, the Korean Airport Corp.

There’s clearly something wrong here. The Philippines is being set up to buy not just from Korea but also from the sole Korean fabricator. Obviously the country will not benefit from a non-competitive bidding. Filipinos will pay good money to prop up a foreign monopoly.

How did this situation arise? Obviously, from restrictive bidding rules, like:

• only Korean bidders may participate;

• subcontractors may be hired, but only if Korean too;

• only Korean-made products may be supplied and installed, except when no Korean contents are available;

• sourcing from non-Korean suppliers shall not exceed four percent of the loan; and

• such outside sourcing should first be approved by the Korean EximBank.

There are other ILS and DVOR/DME makers the world over. Their runway takeoff and landing gadgets could be superior yet cheaper.

Aside from the quality and cost, there is also the issue of passenger safety.

Notably, Korean Airport Corp. rolled out its DVOR/DME only two years ago, and its ILS only a year ago. No problem: the Korean EximBank inserted a clause that the manufacturer needs only two years’ experience to qualify. That did not allay but actually worsened the risk.

Even the three Korean bidders are uneasy. One of them inquired if Korean Airport Corp. might short-circuit them and participate directly in the bidding. That’s possible, the DOTC bids and awards committee replied. Nothing in Korean EximBank’s provisos forbids the manufacturer from directly bidding.

Obviously, the DOTC needs to cancel the August 29 bidding and review its rules. It might even consider foregoing the loan and fund the navigational aids by itself. Filipino bidders and lenders may participate — along with more reliable foreign makers.

*      *      *

The other week employees of the Metropolitan Waterworks and Sewerage Administration picketed their compound in Quezon City. Angrily they yelled that the new MWSS board of trustees is more profligate than the previous one. An example is that the trustees meet up to four times in one day in order to justify collection of a fat per diem for each attendance. It was worse than the old board, which had awarded itself up to 32 months’ pay per year.

Chairman Ramon Alikpala immediately presented papers to debunk the claim. The board, he said, has in fact limited per diems of trustees to about P33,000 for two monthly meetings. The four meetings did happen once, when board committees had to finish their work before the meeting of the board proper. But the trustees collected per diem for only one meeting, Alikpala said.

Alikpala used to head the Water Resource Board.Aside from him, the present MWSS trustees are: (administrator) Gerardo A.I. Esquivel, (Ateneo president) Fr. Jose Villarin, SJ, Atty. Emmanuel Caparas, Ma. Cecilia Sor-iano, Benjamin Yambao, Hermogenes Fernando, and (Government Corporate Counsel) Raoul Creencia.

The board has suspended the 32 months’ pay, which the old board granted to itself, and to MWSS managers and staff. Alikpala suspects this to be the reason for the employee protest action.

The new board had no choice but to remove the excessive bonuses. The Commission on Audit and the new Governance Commission for Government-Owned and -Controlled Corporations have disallowed them.

From the records, a driver used to make up to P97,000 a month, plus car plan. Today his pay is only P36,000 a month, still high when compared to other government agencies.

*      *      *

Reader Andrea A. DeGuia has a complaint about the Land Transportation Franchising and Regulatory Board:

“It seems that the LTFRB takes care only of franchises of big bus and taxi lines. It has no time for small public utility vehicle operators, who have been waiting for franchise approval for three years running. They are being denied the capability to earn a decent living.

My two nephews filed for a mega-taxi franchise in 2009. Up to now they have yet to receive word about the status of their application. One of them has a wife and two kids to feed. They have to depend on me for living expenses, and as a 75-year-old retiree I rely only on a meager monthly pension.

“At the start of this year the LTFRB talked about putting priority on individual-operator franchises. It’s now almost the end of August, and the agency has not begun to process their papers. My nephews’ FX is rusting away on the sidewalk outside.”

*      *      *

Catch Sapol radio show, Saturdays, 8-10 a.m., DWIZ (882-AM).

E-mail: [email protected]