Friday, 14 September 2007

Favila on ZTE deal: Go ask DOTC chief, not me

By Delon Porcalla
Original article at The Philippine Star
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070913187

After being prevented by Malacañang last Wednesday from facing lawmakers on the questionable broadband project, Trade Secretary Peter Favila attended the House hearing on his department’s budget yesterday where he washed his hands of the controversy and passed the buck on a fellow Cabinet official.

Favila told the House appropriations committee that it was Transportation Secretary Leandro Mendoza who could best explain the questionable $329 million broadband deal involving the ZTE Corp. of China.

“I’m a little bit at a loss here because this is a (Department of Transportation and Communications) project. As I understand, the DOTC is the implementing agency. I’m just as amazed as you are. I honestly don’t understand. That’s why I am looking for answers to it,” Favila told the committee.

“As trade secretary, my responsibility really is to look after the bilateral relations that we have. I asked the Speaker why DTI (Department of Trade and Industry)? And I haven’t received an answer yet to this date. Not that I’m questioning the Speaker but I’m just seeking a clarification,” Favila explained.

Asked by Rep. Rufus Rodriguez of Cagayan de Oro to explain his absence at the Question Hour on Wednesday, Favila said he was willing to attend but was prevented at the last minute by Executive Secretary Eduardo Ermita.

“I think the Speaker is well-informed. And I sent him a reply, which is an indication of my desire to cooperate. Nonetheless, I received an instruction from the executive secretary. As to what reasons I would not know. I will ask him your honor,” he said.

“We asked you to bring a copy of the loan agreement, precisely for transparency. Would you say Malacañang does not want transparency? It’s more of an exploratory request, not an investigation,” Rodriguez said.

But panel chairman Rep. Edcel Lagman reminded Rodriguez that he could ask questions about the ZTE contract only when it is the time for Mendoza, or Ermita to testify.

Marikina Rep. Marcy Teodoro, a member of the administration bloc, said he supports the move of the chamber to conduct an in-depth investigation. “I think this should be investigated because this is a loan.”

Finance Secretary Margarito Teves earlier said that what was signed was not a contract but only a memorandum of understanding.

Honor deal


A day after the Supreme Court (SC) issued a temporary restraining order on the NBN project, President Arroyo maintained the government must honor all legal contracts and agreements.

She issued the statement in her speech at the launching of the Bishops Ulama Conference with the Armed Forces and the Philippine National Police in Malacañang Wednesday night.

She however also said her administration will fully abide by the decision of the courts on “matters of dispute.”

“We live by the rule of law. We abide by what the courts of the land decide. We must be a government that honors contracts and agreements that go through the required processes despite media attacks,” Mrs. Arroyo said adding that “we must be a government that abides by what the courts of the land decide on matters of dispute.”

Asked by reporters after the ceremony to elaborate on her speech, the President said: “As long as the contracts go through the right process, we are required to comply with them.”

Not a contract


As far as former socioeconomic planning secretary Romulo Neri is concerned, the only document that was signed regarding the national broadband network project was a prospective supplier’s agreement.

Neri said that the supplier’s agreement alone could not be implemented as a contract since it still requires the signing of a loan agreement.

“It’s a prospective supplier’s contract I think. I haven’t seen the contract that’s why my impression is that it’s a prospective supplier’s contract,” he said.

Neri pointed out that the usual practice for projects financed by official development assistance loans from institutions such as the World Bank and Asian Development Bank is that a loan agreement should come before the supplier’s agreement.

However, he said that it is not unusual for the Department of Finance to do it the other way around, particularly when it involves Chinese funding.

“In our case, normally when we do it with the World Bank and the ADB, we sign the loan agreement first before any supplier’s agreement is done. Opposite sila (It’s the opposite with them),” Neri said.

“Apparently Finance does that because China normally requires a supplier’s contract before they process any loan agreement,” he added.

Neri, who was recently moved to the Commission on Higher Education, recalled that what was brought before the NEDA was the NBN project proposal only.

Neri said that he does not know what the TRO is for since there is no contract to implement yet.

“I haven’t seen the TRO yet. I understand it stops the implementation. There’s no contract to implement yet because the contract is not yet effective,” he added.

Lawyer Oliver Lozano filed yesterday a supplemental impeachment complaint against Commission on Elections Chairman Benjamin Abalos for alleged influence peddling in connection with his reported brokering for ZTE.

The three page complaint which was sent to the offices of opposition Rep, Carlos Padilla and Sorsogon Rep Jose Solis cited news articles on the allegations by a son and namesake of Speaker Jose de Vencia Jr. regarding attempts by Abalos to bribe him with $10 million to back out of the competition for the broadband project. – With Paolo Romero, Marvin Sy, Perseus Echeminada

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