Defense chief says gov't didn't know firm in Navy deal was blacklisted


Posted at Feb 19 2018 11:31 AM | Updated as of Aug 29 2019 02:29 PM

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MANILA - The Duterte administration was not aware that the Korean firm tapped to supply 2 warships for the military had been banned by Seoul from participating in public projects, Defense Secretary Delfin Lorenzana admitted Monday.

The Aquino administration started the P15.74-billion acquisition project with Hyundai Heavy Industries (HHI). In August 2016, the Duterte administration signed the notice of award for the firm to supply 2 missile-capable ships to the Philippine Navy.

Digitally rendered image of the 2,600-ton frigate to be built by Hyundai Heavy Industries for the Philippine Navy. Hyundai Heavy Industries.

During a Senate probe into the deal, Senator Panfilo Lacson said HHI was an "improper" business entity when it entered negotiations with the Philippines.

HHI executives in 2015 were found guilty of bribing a Korean official to become the supplier of reactors for a power plant in UAE. The firm was then banned from joining state-led bids for the next 2 years, he said.

"We did not know about this blacklisting. We just presumed that the previous...did their due diligence. We're just continuing their job," Lorenzana told Lacson.

"There was a presumption of regularity in the process," the Defense chief added.

The Philippines will nonetheless pursue the contract with Hyundai and has sent a team to Korea to talk with the firm's officials, said Lorenzana.

Manila expects HHI to deliver the first frigate in 2020, he said.

Presidential Spokesperson Harry Roque meanwhile had said officials of the Aquino administration should be held liable over the deal. The Duterte administration, he said, merely performed a "ministerial function" in giving the notice of award.

"Kung totoo na blacklisted iyong binigyan nila ng kontrata, dapat managot iyong mga opisyales ng mga nakalipas na administrasyon at sabihin sa atin bakit naging ganoon ang kanilang naging desisyon," he told reporters earlier this month.

(If they gave the contract to a blacklisted firm, the officials of the previous administration should be held liable and explain to us how they came up with their decision.)

Watch a live streaming of the Senate probe here.