WB gives RP benefit of doubt in biddings

By Mia M. Gonzalez, Business Mirror

Posted at Feb 10 2009 01:12 AM | Updated as of Feb 10 2009 09:12 AM

After the bidding under World Bank rules for a WB-funded road project was found by the bank as wracked by graft resulting in a national controversy, the WB has now agreed to try Philippine bidding rules that is apparently a sign of the bank giving the benefit of the doubt to its critics.

The use of Philippine bidding rules will be formalized in an agreement to be signed at the Philippine Development Forum in April, reported Budget Secretary Rolando Andaya Jr. on Monday.

Andaya said the World Bank and government reached the agreement during a weekend meeting in Baguio City, and that the Philippines will be used as a “pilot country” to test the new scheme.

“We’re moving toward adopting the laws of the country itself. That is our direction. In the forthcoming Philippine Development Forum, we will sign a MOA [memorandum of agreement] with the World Bank regarding this,” he said.

Andaya said the development is a positive offshoot of the problems arising out of the controversial National Road Improvement and Management Project 1 (NRIMP 1)—the World Bank-assisted project reportedly tainted by collusion—which highlighted the need to adopt just one set of bidding rules for projects in the country.

He said the bidding process for NRIMP 1 was guided by World Bank rules, which is the practice of the institution and not its host country’s.

Meanwhile, the Department of Public Works and Highways on Monday said it has already submitted to the Commission on Audit its “clarificatory response” explaining the department’s alleged noncompliance with budgetary limits and alleged anomalies in projects.

At the Palace, Deputy Presidential Spokesman Lorelei Fajardo in a news briefing said the latest allegation of corruption - in connection with the WB bidding collusion report - against President Arroyo’s husband, Jose Miguel Arroyo, is “unfairly hurting” the Chief Executive.

“If there’s anything good that came out of NRIMP 1, it’s that there will be some confusion, misunderstanding if different sets of rules are followed. They [World Bank] insisted on their own (rules) which we understand because that’s their money but our point is, it’s a loan that we have to pay for so we should also have a say on what rules to use,” added Andaya.

“I heard that the Philippines will be used as a pilot country in adopting the ‘country system.’ The World Bank has agreed that for big projects, Philippine (rules) would apply. And if it turns out well, they will adopt the other systems in other countries,” he said.

Andaya said that government started drafting the guidelines for the adoption of government bidding rules in WB-assisted projects immediately after the Philippine Development Forum in Clark Freeport, Pampanga, in March last year.

“We gave ourselves a one-year deadline to come up with the guidelines because our objective is since the World Bank is the biggest (lender), if the World Bank would initiate (the adoption of the host country’s bidding system), the theory is the ADB will follow and the others would follow,” he said.

To differentiate Philippine and World Bank bidding rules, Andaya said a contractor will not be allowed to bid beyond the ceiling set by the government while World Bank rules reportedly allow it.

“That’s their system which they believe is right. We also have our system which we believe is right. So there has to be a convergence to agree to have a test case to show which one is really right. Our point is, there was a problem (in NRIMP 1). Please try our system,” he said.

The Budget Secretary also explained that under the WB system, it is the bank that decides the winning bidder not the government.

Andaya, who said he is ready to appear at the Senate probe on the NRIMP 1, wondered aloud why the World Bank has not publicly released its report on an internal investigation of the project, which reportedly implicated several past and present government officials as well as the President’s husband, Jose Miguel Arroyo.

Further on the President’s husband, Fajardo said the President has more challenges to face, however, “than dwell on this matter,” especially as it wasn’t the first time Mr. Arroyo had been accused of involvement in irregularities, “none of which were backed by enough evidence to warrant legal proceedings against him.”

“The President just remains focused on what she has to do,” added Fajardo.

In the related subject involving graft in the Public Works department, Public Works Senior Undersecretary Manuel Bonoan also said, “There are many projects that are being cited in the audit, including bridge programs and locally funded projects. I think we need to look into this report of COA, so that we can respond to their findings more deeper.”

The COA in its 130-page report stated that for a period of 10 years, from 1996 to 2006, the national government reportedly borrowed and spent close to P90 billion for 13 different bridge repair and construction projects.

Also, that out of the 3,701 bridges that were expected to be completed in year 2006, the agency only completed 2,467 some of which were reportedly useless because they were built in areas without road links.

The auditing office also said that majority of the department’s bridge construction projects are over budgeted, reportedly exceeding the approved budget for the contract.

Bonoan said there was nothing irregular with the projects and this may have been because since international funding institutions seldom follow the government rules used during the project biddings. (With TJ Agcaoili)