Philippine Senate Probes Controversial China Broadband Project

September 20, 2007 at 10:24 pm | Posted in Uncategorized | Leave a comment

MANILA, Philippines (Mindanao Examiner / 20 Sept) – The Philippine Senate ended late Thursday a series of investigation into the controversial $330-million proposed national broadband network by a Chinese telecommunication firm, ZTE Corporation.

Sen. Mar Roxas debunked the government’s claim that P4.7 billion in government’s communication expenses will be saved as a result of the project which seeks to connect government offices in the country, where many areas are still without telephone and Internet connections.

“Do not say that this P4.7 billion will actually be all totally saved, because a huge portion of this is really government communicating with the citizens,” he said at the joint hearing of the Senate trade & commerce, blue ribbon and defense committees.

“You’re using these numbers not to help clarify but to further confuse,” Roxas, the Senate trade committee chairman, said in a statement sent to the Mindanao Examiner.

He said he was “offended” by Transportation and Communications Assistant Secretary Lorenzo Formoso’s claim that the government communications savings yearly will be P4.7 billion, which would include expenses of the national government, government-owned and controlled corporations and local government units.

He said that the NBN project will only serve the communication linkage between government offices, and that the usual costs will be applied when outside calls, especially international calls, will be made.

Upon Roxas’ questioning, Formoso agreed that when calls go outside the NBN, access charges would have to be paid. When asked further as to the portion of this P4.7 billion which are IDD or other outside calls, Formoso said he did not know.

At Formoso’s answer, Roxas said, “You cannot say that by implementing the NBN project that we will be saving this entire amount or this amount excluding P1 billion which is the annual amortization expense, because you do not know how much will continue to be spent by government talking to the outside world.”

“When you answer my colleagues, please answer clearly because otherwise you are serving to obfuscate the issue and not help clarify it,” he told Formoso.Formoso also failed to answer when Roxas asked him how many of the more than 1,500 municipalities have telephone connections and would benefit from the project.

Roxas strongly urged President Gloria Arroyo to cancel the project or any agreement between the Philippines and China to be covered by a foreign loan.

“Just say No, Mrs. President” Roxas said, pointing out that since the loan has not been obtained, the Philippines can still back out of the deal. He said the ZTE broadband deal was an apparent attempt by unscrupulous “power-wielders” to take advantage of the people’s lack of familiarity with new technology to earn millions in commissions.

He said the legitimacy of the ZTE broadband deal would still be questionable because the idea behind the project is flawed.

Roxas said aside from the scandals and controversies attached to it, the ZTE broadband deal also fails on three counts – there is no urgent need for a national broadband network; lack of information on what the government is buying and insufficient studies and disregard of proper bidding procedures.

“It’s like government spending people’s money to buy for their own use a high-definition, state-of-the art television set rather than setting aside this same amount to provide schools and classrooms with basic computers and even just an ordinary colored TV,” Roxas said.

He also likened the broadband deal to government officials buying PDAs when schoolchildren do not even have pencils to write with.

“Based on the provisions of the supply contract alone, it is obvious that this multi-million dollar contract was driven by supply and not demand, for short-term personal gain, and not for the people’s long-term benefit,” Roxas said.

Roxas said canceling the contract will not result in any serious impairment of our diplomatic relations with China and will actually demonstrate the shared desire of both countries to serve the paramount interest of the Filipino people.

He noted that the overpriced contract is about a year’s worth of EVAT revenues arising from a 12% rate, up from the previous 10%, or about P15 billion. Under this agreement, every Filipino would shoulder a huge 20-year loan for a project that may become obsolete in less than two years.

“This project is not critically important. It is overpriced and failed to go through the standard bidding process. The people have said No to this. The Senate is against it. The Supreme Court has issued a TRO against it. Mrs. President, there is nothing honorable about this contract. The time has come for you to simply just say no.”


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