Aquino: No revival of ZTE deal

PRESIDENT Benigno Aquino III on Monday ruled out the revival of the controversial national broadband project entered into by the Arroyo administration.

Although Aquino recognized the need for such information technology (IT) infrastructure, the President is not keen to revive the deal with China's ZTE Corporation, which was said to be overpriced.

The Department of Science and Technology (DOST) is currently doing an inventory of what the government has as the basis of the broadband network, the President said.

“Now, if there is need to engage the telcos, which was my position, they are already ready as far as a broadband is concerned,” he said. "So [as for] reviving something similar to the ZTE, no way. Pero utilizing what we already have to meet the needs, and that is currently being assessed, the plan is being drawn up by DOST."

The controversial $330-million national broadband network (NBN) deal between the Philippines and China’s ZTE Corp. was cancelled in 2007 after news about anomalous government contracts came out.

The deal was eventually aborted after a series of Senate committee investigations and impeachment cases against former President Gloria Macapagal-Arroyo were filed but did not prosper.

“Coincidentally, nag-report ang DOST kung gaano kamali iyong ZTE na project at kung gaano ka-obsolete by the time it would have been set up,” President Aquino noted.

In a separate report, two government officials said the proposed government broadband network -- similar but cheaper than NBN -- is not being rushed although the government is setting its sights on developing a robust but cheap IT infrastructure.

These views were expressed by Science and Technology Secretary Mario Montejo and newly appointed Information and Communications Technology Office Executive Director Louis Casambre, who are both involved in the project.

“We are not in a rush to implement this but definitely, we need to have such project in the near term,” Montejo told Sun.Star by phone.

In a separate interview, Casambre said he is seriously looking into the proposal, saying the “country sorely needs a solid ICT infrastructure to improve the delivery of social services and public information.”

Malacañang deferred its take on the matter over the weekend since it has yet to get hold of the 36-page proposal made by the DOST.

At present, the Philippine government does not have a consolidated network, unlike its wealthier Asian neighbors.

Instead, each agency maintains a separate network operations center, resulting in high operational costs.

According to an analysis made by University of the Philippines economists Raul Fabella and Emmanuel de Dios in 2008, the government is reportedly spending at least P3.7 billion each year on telecoms usage.

Of this amount, the DOST assumed that P2 billion is spent on Internet connectivity, with fixed-line phones serving as anchor for most data and Internet exchange.

This, the government said, proved to be too costly as it proposed a cheaper way to deliver broadband services such as high-speed Internet and interconnection of all government agencies.

The proposed GBN will ride on the existing transmission facilities of telecommunication providers, particularly the fiber facility of the National Transmission Corp. (Transco).

Transco, the DOST said, has 24 core fibers in its transmission lines, of which four are being utilized.

This infrastructure is government-owned but Transco is currently leasing this to Sy-led National Grid Corporation of the Philippines (NGCP).

Since it will use existing facilities, the GBN will cost substantially lower at P800 million, almost twenty times cheaper than the cancelled NBN-ZTE deal in 2007, which costs P14 billion.

Under the project, the government will have to build two data centers (Manila and Cebu) and points-of-presence that would connect these data centers to 15 satellite areas in Luzon, Visayas and Mindanao.

Other proposed activities for the GBN are the policy on common fund for initial build-up and maintenance and a revenue generation scheme for services it will be providing.

“Mainly, this is needed to recover operational costs for its continued maintenance, and allow for replacement cost for equipment,” the DOST said.

Ghost of ZTE-NBN deal

Still, Montejo said the government will be cautious in implementing the GBN to avoid a repeat of the botched $329-million National Broadband Network deal with China’s Zhong Xing Telecommunications Equipment (ZTE) Corp.

“We are just thinking aloud about it. Everything should be studied. We have to make sure that we’ll have the best option, which is cost-effective,” he said.

Then-President Gloria Macapagal-Arroyo cancelled the contract after conferring with Chinese President Hu Jintao on the matter in October 2007.

But with the government's anti-corruption efforts, a former official of the defunct Commission on Information and Communications Technology (CICT) is optimistic that the GBN will be carried out soon.

“It’s definitely feasible. But it brings up its own sets of problems. Performance levels must be kept and the government should be able to impose sanctions and penalties to see that Service Level agreement standards are met,” ex-CICT commissioner Oliver Chato told Sun.Star.

Ex-CICT chairman Ivan Uy, for his part, challenged the government to address the issue of maintenance.

“Telecom technology evolves very fast and is costly, not to mention [requiring] the continuous training of engineers. It (the government) should take all these concerns into consideration,” he said.

Sun.Star tried to reach the Socioeconomic Planning Secretary Cayetano Paderanga for comment but he has not replied to text messages and calls.

Paderanga, who heads the National Economic and Development Authority, is tasked to evaluate and approve large-scale projects such as the GBN. (Jill Beltran/Sunnex)