President fired de Jesus

Aquino order to review award of dubious deals totally ignored
BY JOEL M. SY EGCO ASSIGNMENTS EDITOR

PRESIDENT Benigno Aquino 3rd had fired Secretary Jose “Ping” de Jesus over a number of “questionable if not dubious decisions” that he made involving three controversial deals that the President wanted amended but were nonetheless pursued by top officials of the Department of Transportation and Communications (DOTC).

Speaking on condition of anonymity, a highly-reliable government source told The Manila Times that de Jesus and his subordinates were actually “asked to resign” after they drew the ire of President Aquino for ignoring his instructions to have certain contracts further scrutinized on suspicion that these may be riddled with anomalies.

These projects are the Communication Navigation and Surveillance/Air Traffic Management (CNS/ATM) System, the Metro Rail Transit (MRT) 7 Project and the inter-connectivity contract between the Land Transportation Office (LTO) and information technology provider Stradcom Corp.

“The President has gone past the learning curve, meaning that he is actually in control and calling the shots, contrary to public perception. By asking these [DOTC] officials to leave, he has proved that when it comes to corruption, there will be no compromise,” The Times source said.

The source claimed that the President has come across the questionable decisions by agency officials on the controversial deals.

“The review of government contracts is necessary to weed out corruption during the GMA [Gloria Macapagal Arroyo] administration.

One can argue that its significance can be a national security concern.

Now, we have to deal with many contracts in DOTC. Similar [to those] in almost every [other] agency, these contracts were rushed or put in motion prior to GMA’s stepping down,” The Times source pointed out.

“One of the closest loyalists of GMA [a former general], was in charge of DOTC. It is not surprising that projects and contracts prepared by this agency were designed to help fuel various [groups of] political [machinery that are] being used to destabilize the [Aquino] government. One solution is to close the valves that fuel this tool for destabilization,” the source said.

While contracts or bid processes that miss their target closures abound, The Times source noted that the same corrupt structure remains with these projects.

Some of these, the source said, have been identified and reviewed but continued by de Jesus despite having been informed by concerned quarters about the tainted projects.

“If [they are] not used to destabilize this government, [these projects still] carry with [them] the stench of corrupt practices that we are trying to get rid of,” The Times source added.

Radar contract
Besides being expensive, the Japanese-funded air traffic management (ATM) project was criticized for allegedly being “flawed,” “futile” and “redundant” since existing air traffic facilities can very well handle anticipated increase in international and domestic flights in the next five years.

Airport sources have said that the CNS/ATM System Project worth P13 billion should be quashed because the existing Manila Air Control Center (MACC) can still effectively manage air traffic.

At the most, the sources added, an upgrade of the MACC should be undertaken.
Questions on the propriety of the CNS/ATM project came after the
Transportation department awarded Package 1 of the project to Sumitomo/Thales Joint Venture on December 23, 2010.

This phase costs P4.2 billion.

“The Commission on Audit stated they [DOTC] cannot award [the project] to Thales considering that they have abandoned the project called the global maritime distress signal system. At [the] time, their name was Thompson CSF. The disqualification of other bidders was also spurious,” The Times source said.

The CNS/ATM project has seven major components—the construction of the air traffic management automation, communications, navigation, surveillance, meteorological system, consulting services and land acquisition.

It aims to achieve greatest operational flexibility, airspace capacity and system efficiency.
The losing bidders were Marubeni Corp. (Indra Systemas), Selex Sistemi-Kanematsu Cor. Joint Venture and Sojitz Corp. (Rayheon Corp.).

The scope of the more expensive Package 2, which is yet to be awarded, includes the installation of an Automatic Dependent Surveillance-Broadcast (ADS-B) Ground Station, En-route Radar (Secondary Surveillance Radar Mode-S), Terminal Radar (Airport Surveillance Radar/Secondary Surveillance Radar), VHF Terminal and Remote Control Air-Ground (RCAG) Communications facility, Microwave link and Very Small Aperture Terminal (VSAT).

Previously, Civil Aviation Authority (CAAP) insiders proposed that instead of embarking on a “complex” project, the Transportation department should just put the newly upgraded MACC into action.

The insiders said that the MACC, at a fraction of the cost of the new CNS/ATM with almost the same functionality, is ready for commissioning.

Filipino-made
Besides, the MACC is home-brewed and Filipino-made.

In comparison, the upgrade of the new MACC would only cost P550 million, way below the CNS/ATM Package 1 that costs P4.2 billion.

Besides being expensive, the CNS/ATM project has no back-up system to speak of and its technology could be rendered obsolete soon because of current research and development works in the US and Europe.

“Chances are, we would be paying so much for something that could be of very little or no use at all,” The Times source noted.

According to other sources, the crafting of the project’s terms of reference was riddled with anomalies all the way to the bid process itself. “Despite this, pressure to pursue this project has come from the upper echelons of the [DOTC].”

Interestingly, DOTC Undersecretary for Plans Ruben Reynoso, who runs the technical and planning aspects of the department, was a member of the National Economic and Development Authority (NEDA) board that approved the project.

“He [Reynoso] is in direct conflict of interest since he is defending the same projects in the pipeline (that) were reviewed when he sat in the NEDA board during GMA’s time,” The Times source said.

MRT 7
Also, Reynoso was noted to have approved of the MRT 7 project during his stint at NEDA.
The MRT 7, practically a repeat of the “disadvantageous” MRT 3 project that was done through a build-operate-transfer (BOT) scheme, was to have been awarded by DOTC during Mr. Aquino’s incumbency.

“Aside from its apparent overprice, the government is giving again full sovereign guarantee, thereby, removing any risk to the proponent during operations. This runs counter to the President’s PPP (public-private partnership) policy,” the source said.

Mr. Aquino, according to The Times source, wanted an amendment of the project to prevent the same mistakes committed in the past involving the MRT 3 project which the government continues to pay for to this day.

Frequent breakdowns and accidents at MRT stations had somehow contributed to the dent in the popularity of the President.

Interconnectivity
While Stradcom Corp was awarded the LTO-IT project using the build-operate-own scheme under the Ramos administration, actual implementation of the project kicked in during the past administration.

At the time, the project’s scope went beyond its original contractual engagement, which was limited to vehicle registration and driver’s license interconnection.

From these two items, Stradcom was able to expand its operations to and derive income from private emission testing, insurance and drug testing, radio frequency identification device, online driver’s license renewal and interconnectivity with the Bureau of Customs, among others.

Since Stradcom’s operations were suspected of being used as a milking cow by personalities identified with the previous administration, LTO chief Virginia Torres took on the company and attempted to replace its heads.

Recently, the IT firm filed criminal charges against Torres for allegedly refusing to pay the P1 billion owed the former for services rendered.

Torres believed that the interconnectivity project was illegal and improper because Stradcom took absolute control over the database, which the government owns.

Torres said that government should have a share in the fees collected by Stradcom from motorists because it is the owner of the database.

She even questioned the legality of the contract with Stradcom.

“It [Stradcom] has full control over the database. Not even authorized DOTC representatives can gain access to the servers or audit the systems it owns. While the LTO head has taken the initiative to take on Stradcom, the DOTC secretary has provided relief for the same,” the source claimed.

Torres refused to pay up despite an order from the DOTC on April 1, 2011 when Undersecretary Dante Velasco, replying to a letter complaining about Torres, informed Stradcom officials that she had been ordered to pay the company.

Instead of complying with the order, she filed an inter-pleader suit asking the courts to settle the issue of Stradcom’s ownership where a rival group in Stradcom led by Aderito Yujuico and Bonifacio Sumbilla has claimed ownership of the IT firm and tried to take over its offices at the LTO in December.

Torres was then forced to go on leave for two months.

News about de Jesus’ resignation was confirmed just a day after Torres had returned to the LTO.

Another day later, three DOTC undersecretaries, including Velasco, and
one assistant secretary also resigned.

Executive Secretary Paquito Ochoa Jr., according to The Times source, may be next in the President’s “uncompromising” campaign against wrongdoing in his Cabinet.

Ochoa, it was learned, was instructed by Mr. Aquino to revisit the same three projects that undid de Jesus but apparently ignored the order.