BIZ COLUMN:  LET'S  LEARN  LESSONS  FROM  ZTE-NBN  DEAL

MANILA, OCTOBER 8, 2007
(STAR) DEMAND AND SUPPLY By Boo Chanco M- No, it isn’t over. Malacañang, if it is truly looking out for the national interest, should be the last to even suggest that it is now moot and academic… that it is all over. Ate Glue may have dropped the project for now but both the legislature and the judiciary have remaining tasks to accomplish… and all these tasks have to do with making sure we have learned our lessons from all the ruckus over the broadband deal.

I realize my friend Acting Justice Secretary and Solicitor General Agnes Devanadera is only doing her job when she said she will file the necessary papers in the Supreme Court to ask that the cases related to the broadband deal be dismissed for being moot and academic. But those cases are not yet moot and academic before the Court resolves a number of issues, notably the way the Executive branch is able to appropriate large amounts of funds without congressional concurrence by simply declaring a deal falls under an Executive Agreement. That clearly circumvents the Constitution.

The legislature must pass remedial measures to plug loopholes in our laws regarding government purchases that will uphold the principle of transparency at all times with no exceptions. There is also a need to tighten the approval process for foreign-aided and funded projects to protect the people’s money. In this regard, the responsibility and powers of NEDA must be clarified in view of the testimony of Romy Neri. The former NEDA chief gave the impression NEDA technical experts are nothing more than glorified clerks shuffling papers within the bureaucracy in the approval process.

Congress must take cognizance of international studies that indicate the sad reality of how ODAs have become a huge source of corruption in the Third World, thereby wasting resources needed for economic development. Our bureaucracy must be made to realize that just because they have an ODA offer, they don’t have to accept it if the project isn’t a priority. Even taking corruption aside, we have wasted hundreds of millions in taxpayer money paying for commitment fees for ODA we have accepted but are unable to use.

What the ZTE-NBN deal has highlighted is the need to be extra careful with ODA loans because no matter how friendly the interest rate and how generous the grace period, the loan will still have to be paid somehow. The Development Assistance Committee (DAC), a group of bilateral ODA donors, noted that corruption in ODA transactions undermines good governance; wastes scarce resources for development with far-reaching effects throughout the economy; undermines the credibility of and public support for development cooperation, and devalues the reputation and efforts of all who work to support sustainable development; and compromises open and transparent competition on the basis of price and quality.

To address the problem of corruption, the DAC prepared the Recommendation on Anticorruption Proposals on Aid-Funded Procurement in May 1997. China is a signatory to the Paris Declaration on Aid Effectiveness which defines a clear, practical plan to help improve the quality and positive impact of development aid.

Within this framework, donors have committed to giving even greater support to specific areas in the fight against corruption, such as programs of developing countries to strengthen procurement systems and financial management systems. In other words, China has to ensure that its aid programs do not foster corruption.

Taking the ZTE-NBN broadband deal as an example, China should have insisted on a transparent bidding as provided for under Philippine laws and in compliance with China’s commitment under the Paris Declaration. Unfortunately, China nominated a single supplier, in violation of its international obligations to uphold anti-corruption measures in its aid program.

The Executive branch must also realize that one of the best arguments against a government-owned and managed broadband network is government’s own track record with these types of facilities. Other than the notorious Telepono Sa Barangay project initiated during the Ramos administration, the research group of GMA-7 News calls to mind other past communication projects that did not work out as planned:

Very Small Aperture Terminal (VSAT) — The Department of Agriculture embarked on the VSAT project in 2000 to link the department to its field units and other government agencies through e-mail and Internet access. The installation of the equipment started in 2002. The project was underutilized because despite the availability of the equipment, there were not enough funds to develop the information systems. The means of communication between stations still relied on fax machines and telephones.

National Computer Information System (NCIS) — Conceptualized during the Estrada administration, the NCIS project envisioned the interconnection of the police, the courts, and other agencies involved in the government’s criminal justice system. However, the agencies which were supposed to be in the loop were apparently not consulted before the computers were purchased. The Commission on Audit noted irregularities in the project — there was no public bidding, and the purchase of equipment was overpriced by almost P74 million.

The NCIS computers were never taken out of their boxes. Some agencies deemed that the units did not meet their specifications; others were warned against opening the packages due to warranty issues and legal concerns. The project has been suspended since 2001, due to the government’s inability to settle its payables to the private company that supplied the units. The units by today’s standards would be considered vintage and low-tech.

Emergency Network Philippines (ENP) — The Emergency Network Philippines project was formulated by the Department of Interior and Local Government in 1998. The idea was to assign a nationwide emergency phone number and establish an integrated communication system that can validate and relay emergency calls.

Money was set aside in 2002 to purchase ENP equipment for 19 Patrol 117 call centers nationwide. However, there was no budget to actually run the call centers, as the government failed to factor in the maintenance and operating expenses that went with the project. Most of the computer units ended up gathering dust in storage areas. At present, there are five ENP-equipped call centers in operation. These are funded by local governments and donations from a private group (Foundation for Crime Prevention).

Medical transcription

I got this e-mail from Isabelle Gan, writing from Sarasota, Florida.

I read your article on ABS CBN online, “Strong Peso Threatens BPO Investment.” I’m a Filipina living in the US and I am operating a medical transcription company with facilities in the Philippines. The exchange rate, coupled with low productivity and accuracy levels among Filipino transcriptionists, are really killing my business.

The government really needs to stop hyping the industry up and focus more on how to foster better standards for Medical Transcription schools. We find that graduates of these so called schools are so far below the productivity levels we need to be competitive with India and US transcriptionists.

You should write an article about that. Somebody should be addressing the poor quality of our workers. How come entry-level Indian transcriptionists can produce 1,500 lines a day while our new MT graduates can only do 400 lines a day?

Think positive

Now, here’s Dr. Ernie E. from Dallas, Texas.

Doc: Iho, bakit mu naman sinapak yung lalaki kanina?

Boy: E doc, nakita niya na ninenerbyos na ako sa resulta ng AIDS test! tapos sasabihin pa niya...THINK POSITIVE pare!


Chief News Editor: Sol Jose Vanzi

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