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Friday, February 08, 2008
Lozada: Gov't procurement system 'dysfunctional'
MANILA (Updated 2:12 p.m.)- Senate witness Rodolfo Lozada told senators Friday that the government's procurement system is "dysfunctional" and does not really work.
Lozada, testifying on the Senate inquiry on the $329 million national broadband network (NBN) project, said institutionally the procurement process doesn't really work since it is supplied driven when it is supposed to be need driven.
Government projects under this system often go to suppliers who are closed to officials handling the projects, Lozada said.
"The supply-driven is primarily geared towards tailoring the process to the sponsor. We don't look (for the best supplier). It should be need-driven. Our need should be the basis of our procurement but now it is supply driven. If someone in the government knows a supplier they will now tailor fit a project that will fit the (supplier)," he said.
He added that the procurement system's check and balance is "restrained" resulting to the NBN and South Rail type projects.
In the NBN project, Lozada told senators of the $130 million commission which former election commissioner Benjamin Abalos Sr. was protecting.
Abalos was pushing for an NBN project with ZTE, which would be under a government loan. The Abalos proposal was set aside since the instruction of President Arroyo was for a build-operate-transfer (BOT) mode.
The project's actual cost is only $132 million and the $130 million was the commission, Lozada said.
Lozada said $130 million is too big and told Abalos that "bubukol ito" (noticeably big) and was instructed by former National Economic and Development Authority (Neda) Secretary Romulo Neri to "moderate the greed."
Compared to the South Rail Project, which according to Lozada, was overpriced by $70 million, the NBN project was way too big.
He told Senators that proponents of the South Rail Project told him that Malacanang officials also benefited from the project the same as the NBN.
He said commission from projects based on his experience is a norm in the government's procurement process.
Lozada told senators his role in the NBN project. He was tapped by Neri to study proposals for an NBN project.
The group of Abalos is proposing a government while the group of Jose "Joey" de Venecia III is proposing the project under a BOT.
Lozada said he reconciled the proposals of both Abalos and de Venecia with de Venecia as the main proponent of the project under BOT and Abalos being de Venecia's supplier.
He said the trouble only started when Abalos wanted to protect his $130 million commission.
Abalos in pushing for his proposal under a government loan talked to First Gentleman Mike Arroyo, he said.
Lozada testified that at one time, Abalos called the First Gentleman about Neda's objection to his proposal.
He said after that call, Malacanang already approved the NBN project under a loan agreement and was transferred from the Commission on Information and Communications Technology (CICT) to the Department of Transportation and Communication.(Sunnex)
For more Philippine news, visit Sun.Star Cagayan de Oro.
(February 8, 2008 issue)
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