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Thursday, November 22, 2007
Gov't, World Bank deny suspension of RP loan
MANILA -- The government and the World Bank said there is no suspension of the US$232 million loan package for the second phase of a road improvement project in the Philippines.
In a joint statement read in Malacañang by Cabinet secretary Ricardo Saludo, the government and the World Bank said the international group has yet to discuss the proposed loan package for the second phase of the National Road Improvement and Management Program (NRIMP).
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"Contrary to reports, the bank has not suspended any loans for the NRIMP. The second phase amounting to US$232 million is to be deliberated by the World Bank executive board upon submission of additional information requested when the board first discussed the loan proposal last month," the statement read.
Earlier reports said the World Bank is suspending the second phase of the loan package until the controversies surrounding the first phase of the NRIMP have been resolved.
The three road projects under the first phase had been canceled after their contract price went above approved budget ceilings of the World Bank and amid allegations of bid rigging.
The first phase involved a US$33 million loan from the World Bank and covers the section of Marihatag-Barobo/Tagbina-Hinatauan Road in Surigao del Sur, San Enrique-Valle Hermosa Road in Negros Occidental, and Cabancalan-Basay Road also in Negros Occidental.
The joint statement confirmed both the cancellation of the first phase of the NRIMP and that it was triggered by failed biddings in the road projects.
"The government and the bank instituted measures to address bidding problems in the future. The World Bank continues to support development in the Philippines and remains actively engaged with the government in strengthening governance and fighting corruption," the statement added.
Saludo said this simply means there is no suspension of the loan package since there is no existing loan yet.
"There is nothing to suspend, there is no loan for phase two yet. That hasn't been approved. It is up for deliberation by the executive board of the World Bank," he said.
He added that the board simply opted to await the results of the investigations and recommendations of the World Bank's Department for Institutional Integrity on the controversies surrounding the phase one of the NRIMP before deliberating on the proposed second phase of the project.
Saludo said the first phase would still be undertaken but without the World Bank, which was supposed to partly finance the NRIMP. Public Works Secretary Hermogenes Ebdane Jr. had already requested President Gloria Macapagal-Arroyo to finance the project locally after he cancelled the third bidding in 2006.
Budget Secretary Rolando Andaya Jr. said "technically" it is the "deliberations" on the proposed loan package for phase 2 that had been suspended and not the loan itself.
Andaya said there is no loan package for phase 2 to speak of yet because the World Bank has yet to approve it. He added that if ever it gets approved, the road project would not be implemented until next year.
He said the good news, however, is that acting World Bank director Maryse Gautier, in a meeting Wednesday morning, informed him that they are recommending the lifting of the "suspension" to the board to pave the way for the NRIMP project to push through.
He said Gautier also clarified that the suspension of deliberation was not a result of alleged corruption or bid rigging as earlier reported.
Andaya added they expect that the Integrity Group had already been able to submit its report both to the World Bank board and the Philippines's Office of the Ombudsman.
He also announced that the World Bank is also adopting the Philippine Government Electronic Procurement System (PhilGEPS) in the implementation of the NRIMP, which is undertaken under the Department of Public Works and Highway.
He said the Philippines recommended to the World Bank to adopt the country's list of blacklisted companies to avoid a repeat of the previous experience in NRIMP's phase one package where a Chinese construction firm that has long been blacklisted by the Philippines had been allowed to take part in the bidding.
Andaya said the same procurement system would be adopted in the other World Bank-assisted projects in the country that is undertaken under the health, education, agriculture, and environment departments and the Local Water Utilities Administration.
He said this is an exemption and a big change from the World Bank's policy that only the International Competitive Bidding system, where the highest bidders are usually awarded the project, would be used. Under the present policy, only its preferred procurement system should be used in undertaking World Bank-assisted programs in whatever countries.
Under the PhilGEPS, the bidder with the lowest bid is usually awarded the project. Each bidder is also required to issue a warranty to ensure the quality of their product or work.
Andaya said the World Bank also wants to "pilot test" the PhilGEPS to determine if it could adopt the bidding and procurement policy in other countries that it is also assisting like Cambodia, Laos, and Indonesia.
He said the World Bank is initially releasing a US$1.5 million trust fund to "test" the PhilGEPS. He said the trust fund would be used to educate other countries on the new system which includes providing seminars on PhilGEPS in countries as far as those in Africa, and inviting foreign leaders to visit the Philippines to observe and personally witness the actual conduct of the bidding and procurement process.
He said other foreign lending agencies are now looking at the possibility of adopting the same procurement system like the Japan Bank for International Cooperation and the Asian Development Bank.
On the plan of the Senate to investigate the World Bank loan issue, Andaya said they could go ahead with their investigation but as far as he is concerned, there is no existing problem nor did the suspension affect any existing Philippine laws or policies.
He said it is the World Bank that had agreed to some changes by adopting the Philippines's own procurement policy just to ensure that phase 2 of NRIMP would push through.
He also dismissed fears that the NRIMP issue would lead to a loan crisis as the US$232 million loan package is "small" compared to the US$7 billion loan package that the Philippines expects from World Bank in 2008. (JMR/Sunnex)
For more Philippine news, visit Sun.Star Dumaguete. (November 22, 2007 issue)
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