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Sunday, September 23, 2007
Arroyo suspends controversial broadband deal
MANILA -- President Gloria Macapagal-Arroyo ordered Saturday the suspension of the multi-million dollar deal of the national broadband network (NBN) and cyber education projects with China amid allegations of bribery and corruption, officials said.
The suspension followed allegations of bribery and overpricing in the $330-million project won by China’s Zhong Xing Telecommunication Equipment Corp. (ZTE) to establish a national broadband network for the government, Trade Secretary Peter Favila said.
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Favila said Arroyo ordered the “indefinite suspension” of the projects because of the controversy that prompted a Senate investigation into the ZTE deal. He declined to elaborate on the decision, citing President Arroyo’s “executive privilege.”
Favila and acting Justice Secretary Agnes Devanadera announced the suspension but clarified that the contract with ZTE was above board and legally sound.
“I think this is the best thing to do now. Those are her instructions,” Favila said referring to Arroyo’s personal instructions to him regarding the NBN deal.
According to Favila the Chinese officials were already informed of the suspension and were assured that they “understood” the President’s order.
Howard Xue, ZTE’s global marketing director, denied allegations his company bribed Philippine officials to win the contract.
ZTE “proposed the best price, financing and technical proposal... There is absolutely no need to bribe anybody to get the project,” he said.
The cyber education project, which aims to provide educational services over the Internet to 90 percent of the country’s public elementary and high schools, was partly funded with a loan from China. Critics questioned the relevance and cost of the $465.5 million effort.
The suspension came days after the Senate blue-ribbon committee conducted an inquiry on the alleged anomalous NBN deal.
Jose de Venecia III, founder of the losing bidder Amsterdam Holdings Inc. (AHI), told a Senate investigation that Commission on Elections Chairman Benjamin Abalos received bribes to push the ZTE deal, and offered him $10 million to withdraw. Abalos has denied the allegations.
De Venecia also said he was told to “back off” by the President’s husband, Mike Arroyo.
But a lawyer for Mike Arroyo, Jesus Santos, said the first gentleman only reminded de Venecia—the son of the speaker of the House—that as a relative of a government official, he should not get involved in government transactions, Santos said.
Cancel it
Two Cebuano congressmen support President Arroyo’s decision to suspend the ZTE deal but Representative Antonio Cuenco (Cebu City, south) saw the need to cancel the project, adding that it is “not advantageous to the government.”
However, Cuenco clarified that he does not believe that Abalos and the first gentleman were involved in the transaction.
“Dapat cancelahon gyud (It should be canceled),” Cuenco told radio dyLA yesterday.
Representative Pablo Garcia, (Cebu, 2nd district), for his part, said the suspension will help clarify the issues hounding the project.
“She’s on the right track. Makahunong na sa kagubot,” Garcia said in the same radio interview.
As to moves that it should be canceled, Garcia said the Supreme Court will decide whether there is a need to do so.
The High Court has issued a temporary restraining order on the ZTE contract based on the petitions of de Venecia’s AHI and Iloilo Vice Gov. Rolex Suplico.
‘Devoted’
Presidential Management Staff Chief Cerge Remonde, for his part, said the deal is aboveboard.
Remonde said he understands that Favila had to announce the President’s suspension order without further explanation.
Meanwhile, Representative Eduardo Gullas (Cebu, 1st district) appealed to his colleagues in Congress for calm and sobriety, warning that a “precipitous” House revamp is bound to set back priority legislation, such as the 2008 national budget and the low-priced medicine bill.
Gullas made the call in the wake of the controversial national broadband network project.
“We want to make this very clear. To many of us pro-administration lawmakers, Jose de Venecia Jr. is our Speaker, as long as he remains devoted to the President,” he said.
“We are duty-bound to find practical solutions to our nation’s problems, not aggravate them.”
Revamp?
Gullas also warned that a sudden House revamp could derail the passage of the 2008 budget and the drug import liberalization program that is meant to give Filipinos access to affordable medicine.
Gullas is House appropriations committee vice chairman and one of the principal authors of the cheap medicine bill.
Cuenco and House Deputy Speaker for the Visayas Raul del Mar also said they support de Venecia’s leadership.
AHI, co-owned by the Speaker’s son, insisted it should have won the contract because it offered to build the broadband network at no cost to the government, unlike the ZTE deal that required the government to secure a $330-million loan from China.
The broadband deal and the cyber education project were among a package of Chinese investment projects worth $904.4 million obtained by Philippine officials during Arroyo’s visit to China in April. (AP with GC/GAC of Sun.Star Cebu/Sunnex)For more Philippine news, visit Sun.Star General Santos. (September 23, 2007 issue)
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