, OCTOBER 4, 2007 (STAR) By Paolo Romero - The government is determined to set up a national broadband network despite its scrapping of a $329-million NBN deal with ZTE Corp. of China amid allegations of bribery and corruption that led to the resignation of elections chief Benjamin Abalos.

Executive Secretary Eduardo Ermita said yesterday that while President Arroyo has cancelled the contract with ZTE Corp., she remains committed to link all government offices and agencies through a broadband network.

He stressed, however, that there is still no official initiative to set in motion a new NBN project.

He recalled that Mrs. Arroyo last week ordered Transportation and Communications Secretary Leandro Mendoza to discuss with local telecommunications firms how to fill the “gap” in the country’s broadband requirements following her suspension of the ZTE deal and another controversial program – the Cyber Education Project.

Ermita said allegations of bribery and the sudden resignation of Abalos “weighed heavily” in her decision to cancel the “supply contract” with ZTE Corp.

“Knowing that there is a need for it (NBN), then there will be other ways (to implement it). Maybe, for the moment, we’ll let the situation die down and then look for other ways so that we can undertake a similar project that will achieve the same objective,” he said. “The bottom line is that which will benefit the greater majority of our people.”

But with the extent of the NBN controversy, Ermita said it is his “gut feel” that “it is not realistic” to presume that the NBN plan would be revived “within a week or month.”

“I’m sure our concerned Cabinet members will have a different way by which the project can be achieved,” he said.

Only a few of Mrs. Arroyo’s Cabinet members are privy to the reasons behind her decision to trash the NBN deal with ZTE Corp., according to Ermita.

Ermita said he was himself taken aback by the decision and that other Cabinet members didn’t say if they had been told of the development before she left for China and India.

“Let’s just say the leader instinct in her, her political instinct somehow influenced her that this is the best course of action to follow,” he said.

He said Cabinet officials, particularly Foreign Affairs Secretary Alberto Romulo and Trade Secretary Peter Favila are now busy trying to assure international investors and foreign governments that the Philippines honors contracts.

“I think we just have to face realities and we will put it on the shoulders of the members of our Cabinet... to be able to explain this particular incident very well so that the other investors will not be adversely affected by their attitude towards the Philippines,” he said.

“So let’s just hope that things will simmer down in the future and in the same manner that it was announced that the Chinese President was very understanding of the position that our President is in,” he said. Ermita also hinted at the non-appearance of the officials in future Senate hearings on the NBN, saying they had already said everything they knew about the issue.

“The principal persons involved are not in the equation anymore,” he said.

No stopping Senate probe

Senators vowed yesterday to continue with their investigation of the NBN issue but said they would have to slow down on public hearings to enable the technical working group of the committees involved to complete the required documentation in “10 to 14 days.”

But even before the Senate could resume its investigation, Sen. Jamby Madrigal accused Blue Ribbon committee chairman Sen. Alan Peter Cayetano of deliberately delaying the public hearings because of a “very powerful businessman of Castilian descent.”

She declined to name the businessman but said she brought up the issue because she didn’t want the Senate “to be held hostage by such rumors.”

Cayetano denied Madrigal’s allegations saying the hearings would continue as soon as they find the right resource persons. He said it’s going to be a waste of taxpayers money if wrong resource persons turn up at the hearings.

“The questions are repetitive, with no fault to some of the senators, because the bigger picture of how this deal was put together, including the documentation, had not been delivered to us,” he noted.

Cayetano explained that he set no hearing this week because he was unaware that First Gentleman Jose Miguel Arroyo would be back from abroad. The First Gentleman had been accused of telling businessman Joey de Venecia III to “back off” from the NBN project. Congress goes on recess on Oct. 13 up to Nov. 4.

“We practically exhausted our questions for the resource persons available in the last hearings. We did not set a hearing for this week but that did not mean we were not doing anything,” Cayetano said.

“It’s not enough that the President suspends and now they say they are canceling the contract. It’s not enough that there are those who resigned or get charged. We need to have reforms, amendments to the process and the laws (governing tied loans),” Cayetano said.

“We’re finished when we’re finished. Once the documents are complete as well as the testimonies, when we don’t have anymore questions to ask, then we can make a report. But while there are still information that the committee needs, it’s unfair (to) the Filipino people to end this,” he added.

He also said there might be some problems with quorum because many senators would take a break or attend the Inter-Parliamentary Union convention in Geneva, Switzerland. He said that without a quorum, the senators would not be able to cite a resource person for contempt for refusing to attend a hearing.

He said he hopes Mr. Arroyo will not avoid a Senate hearing by flying abroad.

Expected to be summoned in the next hearing, aside from Arroyo, is former socioeconomic planning secretary Romulo Neri.

Meanwhile, senators lauded the cancellation of the NBN deal but stressed those responsible for it should not go unpunished.

“I appreciate this move showing the international community that this government only has honest intention to curb corruption in the country. The termination of this transaction tells us that the President can also be sensitive to public opinion,” Senate President Manuel Villar said.

“I will still push for a closure on this controversy. We should allow the Senate investigation to continue and wait for the committee recommendations on the matter,” he said.

Sen. Panfilo Lacson said a probe should “unmask and punish” those responsible for the deal.

“It is a well deserved victory for the Senate and all of those who have remained vigilant in making sure that this stinking ZTE deal is finally scrapped,” he said.

Sen. Mar Roxas, chairman of the Senate committee on trade and commerce said Mrs. Arroyo acted wisely in canceling the NBN contract.

“This project should never have been started nor approved in the first place. The Procurement Law has to be improved by ensuring all government projects have to go through bidding and/or check and balance processes,” Roxas said.

“Still we need to shed light on who the real culprits are, who nearly got away with this anomalous transaction. We need to know what (First Gentleman) Mike Arroyo’s involvement, if any, in the deal is. We need to know what (President Arroyo) did, if any, when she was informed of the P200 million bribe offer (of Abalos to Neri),” Sen. Francis Pangilinan said.

Sen. Joker Arroyo said the Senate investigation must continue but should be expedited and wrapped up already as it had been overtaken by events.

Sen. Aquilino Pimentel said the President might have finally realized that the deal was fraught with corruption that it could not be justified no matter what.

Speaker Jose de Venecia Jr., for his part, said the country saved more than $329 million or roughly P15 billion with the scrapping of the NBN deal with ZTE Corp.

“I feel elated by the President’s decision, and the agreement of (Chinese) President Hu Jintao to it. I thank them for finally recognizing that a mistake has been done,” De Venecia told a news conference.

He said it was his and Mrs. Arroyo’s stand that an NBN project be undertaken on a BOT (built-operate-transfer) basis, and that he did not know why the “policy changed” at the last minute before the President flew to Boao, China last April 21.

In Boao, Mendoza signed the “supply contract” with ZTE Corp. in the presence of Mrs. Arroyo and Chinese officials.

The contract was to be funded through a loan from the state-owned Export-Import Bank of China, but no loan agreement was signed.

Mendoza, who is at the center of the NBN scandal, said he hopes the scrapping of the contract with ZTE “will put an end to the controversy that is dividing the nation.”

“It will also put an end to all the baseless speculations concerning the project,” Mendoza added. – with Aurea Calica, Jess Diaz, Rainier Allan Ronda

Chief News Editor: Sol Jose Vanzi

All rights reserved