THE fact-finding investigation of the Department of Justice (DOJ) virtually turned into a venue for Communications Assistant Secretary Lorenzo Formoso III to defend the government’s decision to award the US$329-million national broadband network (NBN) project to China’s ZTE Co.

In Tuesday’s inquiry, Formoso reiterated that Amsterdam Holdings Inc. (AHI), which is being represented by Joey de Venecia III, has no financial capability to sustain the project aside from its lack of congressional franchise to operate a telecommunications firm.

Formoso described AHI as “a shell company” with a capitalization of only P5 million when it submitted an unsolicited proposal to undertake the NBN project.

The panel, headed by Justice Undersecretary Ernesto Pineda, mainly focused its questioning on how the NBN contract came about and the officials involved in the transactions.

Pineda defended the conduct of the investigation, saying that it was not intended to further confuse the people with regard to the NBN-ZTE scandal.

He added that the investigation is totally different and more comprehensive that the investigation being conducted by the Ombudsman.

Formoso noted that the supposed NBN-ZTE scam witness Rodolfo Noel Lozada Jr. was never part of the negotiations, pertaining to the broadband project.

He said only himself and 15 engineering experts from the Department of Transportation and Communications’ (DOTC) Commission on Information and Communication Technology (CICT) were always present during negotiations with ZTE officials regarding the NBN project.

Formoso said he could not recall seeing Lozada when he presented the DOTC evaluation to National Economic and Development Authority (Neda) assistant director Ruben Reynoso in March 2007, recommending that ZTE’s proposal is the best for the country as its “technology is cutting-edge and that the government could expect to recoup its investment in four years’ time as the Neda placed the investment rate of return at around 27 percent.”

Formoso noted that the NBN deal is a government-to-government transaction and was in line with the memorandum of understanding between the Department of Trade and Industry and China’s ZTE Co., to cooperate in the development of various programs in the country, including telecommunications.

The DOJ also gave Formoso the opportunity to explain the DOTC’s side on the allegations made by Lozada that the project was overpriced, since the original proposal was $262 million, which later increased to $329 million.

The DOTC official noted that the contract price increased by US$67 million, since the original amount would only cover 30 percent of the country, while the $329-million proposal will cover the entire country.

Formoso explained that there were softwares or applications that were included in the original proposal of ZTE which the Philippine government does not need.

This prompted the Philippine government to ask for the exclusion of the softwares and instead asked the ZTE to increase the base stations for the project, resulting in a higher contract price.

He added that the ZTE proposal is advantageous to the government, since it would entail a 20-year loan agreement, at 3-percent annual interest only.

“The price appeared reasonable to us, considering the due diligence in evaluating the three companies—Arescom, AHI and ZTE. What is equally important is the 20-year loan-term at 3-percent interest rate,” Formoso said.

He also denied reports that certain government officials received kickbacks from ZTE as the project was strictly government-to-government and that there were no middle men involved in the negotiations.

Formoso defended the DOTC’s recommendation for a government-to-government contract instead of the build-operate-transfer (BOT) proposal of AHI, saying that “from a theoretical point of view, BOT is more expensive.”

“At the end of the day, we will still pay [for the BOT project],” Formoso said.

He added that the country would benefit more from a government-to-government NBN project, considering that the government is spending P3.7 billion annually for telecommunications services as compared with P1 billion a year in interest if the project were funded by a foreign loan.

After the hearing, Pineda told reporters that the panel was able to establish that there is such a contract for the NBN project and it passed through the regular process.

“Likewise, we were also able to establish that Amsterdam has no financial capacity to sustain a project such as this,” Pineda added.

The panel has invited de Venecia, son of former House Speaker Jose de Venecia Jr. to appear before the panel on Thursday.

Meanwhile, the panel did not allow lawyer Heraldo Dacayo to answer questions on behalf of former National Economic Development Authority chief Romulo Neri, who recommended the approval of the NBN-ZTE contract.

Instead, the panel summoned Neri to appear before it on Friday.

The panel is s tasked to study whether there were violations of the provisions of Republic Act 9184 or the Procurement Reform Act committed by any government official in connection with the NBN-ZTE scandal.

Pineda said the panel will also scrutinize the affidavits of those invited by the Senate to testify on the NBN-ZTE scandal for possible perjury.

JdV seeks House probe of ‘04 poll mess

LAKAS Rep. Jose de Venecia Jr. of Pangsinan said on Tuesday he would file a resolution calling on the House of Representatives to conduct a full-blown investigation into alleged attempts to rig the results of 2004 presidential elections.

Senate probers looking into the October 19 Glorietta Mall blast vowed to dig deeper amid conflicting claims by the Philippine National Police, which asserted it was triggered by a gas explosion against the findings of private investigators hired by the mall owners blaming it on a bomb attack by still- unidentified suspects.

A SUSPECTED leader of the Asian terror group Jema’ah Islamiyah (JI) and two of his local contacts were arrested by government security forces over the weekend in Davao Oriental.

A RANKING Malacañang official on Tuesday confirmed that he had “loaned” P500,000 to former Philippine Forest Corp. president Rodolfo Noel Lozada Jr. when the latter informed him that he was running out of funds while abroad—and not to keep him from testifying at the Senate hearing on the national broadband network-deal scandal.

THE fact-finding investigation of the Department of Justice (DOJ) virtually turned into a venue for Communications Assistant Secretary Lorenzo Formoso III to defend the government’s decision to award the US$329-million national broadband network (NBN) project to China’s ZTE Co.

ZAMBOANGA CITY—Forensic experts of the United States’ Federal Bureau of Investigation and the National Police have taken samples of body tissues for deoxyribonucleic acid tests to determine if the body that was exhumed on Monday in Tawi-Tawi is that of Jema’ah Islamiyah (JI)  bomber Dulmatin, a military official said.

THE Supreme Court (SC) on Tuesday issued a status quo ante order enjoining the Commission on Elections (Comelec) from implementing its resolution ordering the revision of ballots in the 4,847 precincts in the province of Pampanga.

CITY OF MALOLOS—As personnel of the Waste Custodian Management Inc., the operator of the newly inaugurated sanitary landfill in Norzagaray town, are busy preparing for its inaugural operation, environmentalists in Bulacan have proposed alternatives to prevent the sanitary landfill from operating.