The unwritten rule in DOTC biddings

 â€œKung ayaw, maraming dahilan; kung gusto, maraming paraan.” That Filipino adage is the unwritten rule in project biddings at the Dept. of Transportation and Communications (DOTC). Foreign investors are learning the hard way its meaning: “If unwilling, many whys; if willing, many ways.” A string of them unwittingly have wasted time and money for ignoring the rule.

The latest “victim” is Korean conglomerate Hanjin. A veteran of 70 contracts in the Philippines, it didn’t expect this kind of rat in the Puerto Princesa Airport Development Project. The work, to be financed by the Korean Export-Import Bank, was open only to Korean firms. The DOTC hired Korea’s Incheon International Airport Corp. as consultant for the bidding and design-structure. The bidding was not just for the lowest price the government would pay, 30 percent of the grade, but also best technical (design-building) plan, 70 percent.

Aside from Hanjin, only one other Korean giant joined, Kumho. The rivals submitted the financial bids last October, then presented their credentials in November. Within that regulation period Hanjin protested Kumho’s conflict of interest. It turned out the latter was a partner of Incheon Airports in another ongoing DOTC bidding — for the Mactan-Cebu International Airport Project.

Hanjin asked the DOTC to rule on the matter swiftly. Relatedly, it sought clarification on how the DOTC and adviser Incheon Airports would evaluate the technical side. Rightly so, for Incheon Airports would be in a position to cause any bidder to win, no matter what price or technical plan.

The DOTC bidding officers agreed that a ruling needed to be made fast; the legal staff agreed that there indeed was conflict of interest. Anti-graft laws define and penalize such situations. The bidding rules further required disqualification of any bidder that is related to another or to a third party in the bidding process. More so if, that relationship gives it access to information, and influence over the bid of a rival or the outcome of the bidding.

The DOTC did not rule on the matter. Instead it proceeded with the opening of bids last Dec. 12. Hanjin gave the lower bid, $82,923,000, against Kumho’s $83,257,000. Yet the DOTC disregarded the difference of $334,000 (P15 million). As well it disregarded Hanjin’s many letters up to January seeking a ruling on Kumho’s conflict of interest. No amount of cautioning by Malacañang has made the DOTC do right. One excuse it gave was that it was still seeking the Korean EximBank’s stand. Yet the bank had stated since Jan. 6 that it would let the DOTC rule on the issue. More so since, the bank knows, the DOTC’s bidding and legal staffs already rendered opinions against the conflict of interest.

Incidentally the DOTC opened also last Dec. 12 the bids for the Mactan-Cebu airport project. Confirmed was that Kumho and Incheon Airports truly were participating partners. Back to the Puerto Princesa works, word inside the DOTC is that Incheon Airports has given a higher grade to partner Kumho’s technical plan. That, of course, is to put it ahead of Hanjin’s lower bid in the 70-30 evaluation.

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The Mactan-Cebu airport works are also delayed, this time due to DOTC overindulgence. The bidding, to build and operate for 25 years a new passenger terminal, was for the highest toll to be paid the government. The consortium of Filipino Megawide Construction Corp. and Indian GMR Infrastructure Ltd. gave the highest offer, P14.404 billion. Giant Filipino developer Filinvest and its Arab partner came in second, with P13.999 billion (see Gotcha, 8 Jan. 2014).

Megawide-GMR was expecting to sign the contract last Jan. 6, and start work a month later. But then an unfunny thing happened on the way to the signing. The loser, way past the allowable period in Oct.-Nov. to raise issues, gave the DOTC papers about the winner. Supposedly GMR had reneged on an airport contract in the Maldives, for which it slipped financially, so incapable to undertake the Philippine project. The Indian firm retorted that it was the one suing the island-state for $800 million, for rescinding its contract in a coup d’état. The case was in fact among its documentary submissions in compliance with transparency rules.

Instead of disqualifying the belated complainant, the DOTC entertained the belated complaint. Pending any findings, the project lies in limbo.

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The DOTC is embroiled in yet another bidding storm — over the single-fare system for Metro Manila’s three railway lines. The SM-led consortium says it gave the superior bid of P1.008 billion, to be paid to the government up-front. But the DOTC is awarding the deal to a consortium of Ayala Corp. and Metro Pacific. The latter’s bid was only P103,000 more than SM’s. But it would pay the government only P279 million initially, with the P800-million balance to come in tranches after reaching the 750-million quarterly ridership. That would be in 10-11 years.

The DOTC is accused of fudging its own rules in the P3.85-billion bidding for vehicle license platemaking. Midway into the process, it split the contracts for car and motorcycle plates. This was to accommodate two bidders who lacked financial track records for the combined amount. The DOTC also imposed a US quality-standards test that no longer exists, yet junked a newer one taken by only the lowest bidder. This was to make “compliant” the two favored though higher bidders.

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Why’s everybody talking about PETA’s theater season opener, the comedy-musicale “Rock of Aegis”?

For one, it’s a takeoff from the Broadway hit musicale, “Rock of Ages,” this time adopting songs of the hot local rock band of the ‘80s-’90s, Aegis. For another, the time-place setting is so familiar, the Great Flood in Metro Manila from Super Storm Ondoy of 2009, repeated elsewhere in Luzon, Visayas, and Mindanao. For yet another, it highlights not only the resiliency of the Filipino to rise from calamity, but also the need for political leaders to answer for the disaster unpreparedness.

Starring Isay Alvarez, Robert Seña, Aicelle Santos, Joan Bugcat, and Kalila Aguilos. Directed by Maribel Legarda, written by Liza Magtoto. Matinees and regular shows run Fridays to Sundays till Mar. 9, at The PETA Theater Center, #5 Eymard Drive, New Manila, Quezon City. Tickets available at the box office, or call PETA (02) 7256244 or (0917) 5765400, or Ticket World (02) 8919999.

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

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