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BRITNEY
SPEARS obviously doesn’t have a monopoly of the
perennially reckless child’s half-triumphant lament:
“Ooops, I did it again.”
For here
come some wise guys in the government who have committed
the republic to a project whose seeming lack of planning
and deliberation has astonished—and deeply bothered—not
a few more discerning people.
Here’s
what happened: on one of those frequent recent meetings
with Chinese officials, Palace-Cabinet officials awarded
a $135-billion project to ZTE Corp., one of the largest
state-owned firms in China. The undertaking: an
ambitious plan to set up a “national broadband network”
that, according to no less than the former chief of the
National Telecommunications Commission (NTC), even the
more modern and prosperous America doesn’t have.
The
project is supposedly meant to build up the government’s
communications capabilities by establishing an
integrated and high-speed communications network
interconnecting all state agencies and units from the
national to the barangay level. At least, that’s how
Rep. Joseph Santiago of Catanduanes, the ex-NTC chief,
quotes the press release from government.
What is
wrong here, besides the project’s being hastily
considered, and its equally hasty award, ignoring calls
for a public bidding? A lot of other things.
First,
the absence of a clear feasibility plan. How serious is
the need for one such national broadband network? What’s
the impact of having one? What’s the cost-benefit
equation?
No one
can seem to say right now who conceptualized this and
why, and whether any one in, at least the Neda, which
vets foreign-funded projects, had been consulted about
it.
Our
sources said the concept—three similar proposals from
three different state agencies were made—was, in fact,
pitched to the Cabinet, and the Neda’s Investment
Coordination Committee eventually greenlighted the one
from the Council for Information Technology and
Communications. That’s where Neda’s role ended, because
the decision to pick the private foreign contractor was
done by others.
For
refreshers, let’s be reminded that very recently, the
government, its private sector partners and multilateral
agencies completed two separate reviews involving the
handling of projects: one was on the implementing rules
of the build-operate-transfer (BOT) law, the other on
the official development assistance (ODA).
In both
cases, participants came away more convinced than ever
that even if a project were BOT (“no cash out from
government”) or ODA-funded (“the money will come from
abroad”) there are certain, very real costs that the
taxpayers will have to bear, and these costs had better
be worth it.
So the
wise guys behind the national broadband network had
better be ready to make a good cost-benefit analysis of
this one.
In a
statement on Sunday, Representative Santiago warned that
taxpayers face serious financial risks, even if a
private company would initially build and operate the
network on behalf of the government.
“In the
past, the government ended up needlessly paying large
amounts to cover the debt and foreign-exchange risk
guarantees of BOT projects. Thus, taxpayers are not
automatically insulated from financial hazards insofar
as BOT projects are concerned,” he said.
Mr.
Santiago was proceeding from the premise that the ZTE
deal is a BOT one, but sources said it’s actually a
“tied loan,” presumably one of those quid pro quos with
the Chinese government in the ongoing, long-playing
seduction between Manila and Beijing.
Okay,
whether it’s BOT or ODA, the thing is, as Mr. Santiago
asserts, there are certain costs and risks that must be
carefully weighed. Did this project and this deal
undergo that kind of deliberation?
Besides
the financial hazards in funding the construction of the
project, there’s the maintenance cost. Mr. Santiago
seriously doubts that the government agencies concerned
“can later on cost-efficiently operate and maintain a
reliable national broadband network, once the system is
eventually conveyed to the government.”
The
basis of his pessimism: a few years ago, a similar
project, Telepono sa Barangay, pushed through over the
reservations of some experts. The result: a “white
elephant,” and more marginalized Filipinos feeling more
out of reach from the center than ever.
“The
project now has a grossly degraded and depreciated
infrastructure that is of little use, and yet requires
high maintenance,” the Catanduanes congressman lamented.
He says
such a high-risk investment as the one awarded to ZTE is
best left entirely to private investors, totally on
their own and at their own risk, to try out. He cites,
for example, the case of the so-called third-generation
or 3G mobile communication networks, reminding us of how
“only last year, mobile telephone operators were so
upbeat about 3G. They were all scrambling to build their
networks. Now, operators themselves are scaling down
capital spending for 3G. This, after realizing that the
market is just not ready yet for the new technology.”
And yet
remember how those who got so excited about 3G were
drumbeating for more incentives for the private
investors.
Back to
the broadband: who in government really needs this, and
why is it so indispensable when, like in the
US,
the various agencies can in the meantime engage the
services of the most dependable private broadband
network providers?
According to our sources, the proposed national
broadband network won’t go the way of the Telepono sa
Barangay because the latter involved the installation of
costly landlines that were harder to maintain, whereas
the broadband network becomes more cost-efficient with
time, especially since this project will, supposedly,
use “state-of-the-art technology.”
If it’s
such a great deal, then, all the more there should be no
problem laying it bare before public scrutiny, so any
doubts in the minds of well-intentioned critics like Mr.
Santiago can be eased. Yet here, the project has failed
its first test: transparency.
Until
press time, no one in government could produce a copy of
the contract or documents related to ZTE. Mr. Santiago
deserves to have his questions answered. So do the
people. |
