'NBN open to all players'

By Helen Flores, The Philippine Star

Posted at Sep 14 2011 07:38 AM | Updated as of Sep 14 2011 11:49 PM

MANILA, Philippines - The government is willing to bid out its envisioned national broadband network (NBN) project to all financially and technically qualified proponents, including ZTE Corp., the Chinese firm which figured in the scandal-tainted broadband project during the Arroyo administration.

That is according to the Department of Science and Technology (DOST). But Budget Secretary Florencio Abad said such endeavor is “not contemplated” in the programmed expenditures for 2012. 

Dennis Villorente, director of the DOST’s Advanced Science and Technology Institute, said they have instructions from Secretary Mario Montejo to finish their study on the proposed project before the end of the month so that invitations to potential proponents can be sent out immediately.

President Aquino is expected to make a decision on the project as soon as he receives the DOST study.

Villorente said the main “weakness” of the $329-million NBN project of the Arroyo administration was its being approved without bidding.

“The NBN-ZTE project is an executive agreement with the Chinese government. The Chinese government chose one particular company, ZTE Corp., to supply the equipment,” Villorente said in a phone interview.

At Malacañang, presidential spokesman Edwin Lacierda said that while they were not aware of any existing ban on ZTE or on any foreign firms involved in controversies during the previous administration, they would like to make sure that future deals would be aboveboard and clean.

Montejo said there is no ban on ZTE but that he would prefer that it stay away from the planned broadband project.

Lacierda said in a press briefing that the proposed broadband project is still in the “realm of theoretical discussions.”  

“What we can promise you is this, that insofar as the government is concerned, we will have bidding that will be transparent. It will be a departure from the previous administration’s manner of bidding out projects. It will be something that, as we have promised always, will be a very, very transparent bidding,” Lacierda said.

“We don’t want to pass judgment right now because they are still under study…With respect to specific firms, I don’t know. We don’t know, we are not aware of (a ban). If there is a ban, we have not yet even called out a bidding, for instance, on the NBN so we don’t know even if they are going to participate,” he said.

Lacierda said he cannot speak for the companies that may want to take part in the project “but I can speak for the government that, insofar as the government is concerned, the measure that we’re going to take is going to be in a manner that will ensure accountability and transparency.”

The Government Procurement Reform Act requires public bidding for all procurement of infrastructure, goods and services.

Villorente said that while there are no Filipino-owned suppliers of telecommunications equipment at present, there are multinational companies aside from ZTE which may be allowed to take part in a new NBN project, such as Huawei Technologies Co. of China, San Jose, California-based Cisco, and the Stockholm-based Ericsson.

He said the proposed network would likely be implemented first in the National Capital Region ahead of the completion of a broadband infrastructure in the countryside.

Montejo clarified that the government network is only a part of an over-all digital strategy for the country being developed by the DOST through its Information and Communications Technology (ICT) Office, formerly Commission on Information and Communications Technology.

“We are guided by the Philippine Digital Strategy that was crafted through extensive consultations with the different ICT stakeholders. The DOST will pursue four priority programs in the areas of E-Governance, Internet-for-all, ensuring further growth of the ICT-BPO industry and cybersecurity,” Montejo said.

He said the DOST, together with relevant government agencies, will implement e-governance strategies and programs to achieve transparency at all levels of government, enhance efficiency in government operations, and improve delivery of social services.

“Broadband will forever change the way we receive services from government, how we teach our school children, how government will provide health care and save people from natural disasters,” he said.

“We hope to see the day when Filipino job-seekers applying for work here and abroad need not endure agonizing queues just to obtain all the clearances they need because all the requirements, like NBI and other documents, can be secured online,” Montejo said.

“We propose bandwidth speeds of 4 Mbps for schools so that schoolchildren will fully enjoy the benefits of interactive learning. Currently, the access of Philippine schools to the Internet has a speed of 64-512 kb. In Thailand, by comparison, public schools get an average of 10 Mbps,” Montejo said.

Not in 2012

But even if the Aquino administration appears bent on pursuing its own NBN project, such endeavor is “not contemplated” in the programmed expenditures for next year, Budget Secretary Abad said yesterday.

He said the recommendation of DOST’s Montejo for the establishment of a national broadband network needs Cabinet approval.

He said the Cabinet would have to decide whether the proposed network is necessary or affordable, considering that private telecommunications companies are already providing the same service.

This means the earliest such project can take off is in 2013, or when funds shall have been appropriated for it by Congress. Montejo has yet to submit his proposal to the President and the Cabinet.

ZTE out

But businessman Joey de Venecia III, one of those who blew the whistle on the NBN anomaly, said ZTE Corp. should definitely be out of the picture because it was “a party to the corruption.”

Sen. Francis Escudero, for his part, said allowing ZTE to do business with the government might tarnish the reputation of the Aquino administration.

De Venecia said the DOST should consider only companies “that have integrity” and are untainted by corruption “consistent with President Aquino’s tuwid na daan (straight path).”

“With due respect to Secretary (Mario) Montejo, he should not give ZTE false expectations. Obviously, we do not want (ZTE) to (participate) given what they did in 2007,” he told The STAR.

He said that in 2007, the Supreme Court was asked to bar ZTE Corp. from doing business in the Philippines but because the $329-million project was eventually scrapped, no decision was issued on matter.

“Of course (ZTE knew of the corruption). It takes two to tango and the other half there is GMA (Gloria Macapagal-Arroyo). Our president was a party to crime,” De Venecia said.

He said the cost of the national broadband project during the Arroyo administration was overpriced by as much as $200 million due to commissions and kickbacks for then first gentleman Jose Miguel Arroyo and then elections chief Benjamin Abalos Jr.

De Venecia said a clean broadband contract through a public and private sector partnership will only cost the government around $130 million.

De Venecia also said he is no longer interested in taking part in the planned broadband project.

“But I’m willing to become the President’s adviser at no cost or at zero pesos, on his plan for a broadband network run by the government,” he said.

De Venecia’s joint venture with US partners Amsterdam Holdings Inc. lost out to ZTE Corp.

He said the DOST must make sure that “mobile telephony” or the use of cellular communications is included in its proposed government broadband network (GBN) since it is an integral part of communications in the public sector.

He said one of the defects of the aborted NBN-ZTE system – aside from its being grossly overpriced – was its exclusion of mobile communications.

He said based on 2007 estimates, the government’s annual expense for communications was P4 billion.

“If we do not address this issue of mobile telephony, then any savings in the GBN would be, at best, marginal,” De Venecia said.

The DOST, he said, must prioritize the Armed Forces, the Philippine National Police, and the Departments of Health, Labor and Education in its GBN project.

“These are frontline agencies in charge of public security, health, education and job generation,” he said.

He also said it would be much better if the GBN would be run by the private sector.

There was no official statement from ZTE Corp. office in Manila on Malacañang’s announcement.

“This issue is sensitive. I doubt if we are going to issue a statement at this time,” a ZTE staffer said when contacted by The STAR.

The Chinese embassy, for its part, said ZTE’s possible participation in the proposed broadband project should be regarded as its “commercial decision.” - With Aurea Clica, Paolo Romero, Jess Diaz, Alexis Romero, Christina Mendez, Michael Punongbayan