Commentary-Philippine Daily Inquirer, October 25, 2007
The letters above are not an alphabet soup. They are variants of the generic BOT scheme authorized under R.A. 6957 known as the Build-Operate-Transfer Law, and R.A. 7718 which amends it. In the Senate hearings on the ZTE contract, (or non-contract, as the witnesses from the DOTC call it), BOT and BOO have been repeatedly mentioned.
BOT is a contractual arrangement whereby the project proponent undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof. In plain English, he builds and operates the facility which the Government cannot do, for lack of money. How does the proponent get his money back? He is allowed to “charge facility users appropriate tolls, fees, rentals, and charges not exceeding those proposed in his bid,” assuming he has submitted the lowest bid and most favorable terms, “based on the present value of his proposed tolls, fees, rentals and charges over a fixed term…” Tolls are like the users fees you pay when you drive through the NLEX or SLEX.
But what is a BOO (Build-Own-Operate) contract? It is a similar to a BOT except that the proponent does not have to turn over the facility to the Government at the end of a “fixed term which shall not exceed fifty (50) years”. In other words, he continues to own and operate the facility. That is why such contractual arrangement must have the recommendation of the Investment Coordination Committee (ICC) of the National Economic and Development Authority (NEDA), and the approval by the President of the Philippines.
I understand that Joey de Venecia’s firm, Amsterdam Holdings, Inc. proposed an unsolicited BOO proposal. Are unsolicited proposals allowed? Yes, under the rationale that Government officials do not have the monopoly of ideas for developing our infrastructures. Most often, private citizens have brighter ideas. So, the law not only allows but encourages them provided, “ 1) that the projects involve a new concept or technology and/or are not part of the list pf priority projects, 2) no direct government guarantee, subsidy or equity is required, and 3) the government agency or local government unit has invited by publication, for three (3) consecutive weeks, in a newspaper of general circulation, comparative or competitive proposals, and no other proposal is received for a period of working days, and, that in the event another proponent submits a lower price proposal, the original proponent shall have the right to match that price within thirty (30) working days. Devoid of legalese, the requirements for unsolicited proposals are stricter; competitive proposals are still required except hat the original proponent has the right to match.
And that’s what Joey de Venecia has been stressing. His proposal, assuming AHI is qualified, requires no government loan or guarantee, nor does it ask for a take or pay provision. He competes with the rates of the Telcos, such as PLDT, SMART, Globe and SUN. And it is he who must keep up with technology advances in telecommunications, which has one of the fastest obsolescence in the industry. If he fails, it is he who loses his shirt. Fair enough. Unlike the $320 million ZTE Government project to be funded by a loan from the China Ex-Im Bank. Might we get another white elephant when we have just finished paying our last amortization for the moth-balled Bataan Nuclear Power Plant?
But the bigger question is: do we really need another broadband that the DOTC says will provide a seamless connectivity from the national government offices up to our 45,000 barangays. Let us answer the following questions: How often do our barangay officials need to talk directly to a Department Secretary or Undersecretary? Never. To a Bureau Director in Metro- Manila? Seldom, if ever. They call or go to the provincial offices of the DPWH, DOH, DILG, etc., or course their requests through their mayors, Congressmen or Governors. How about the need to connect up to the 1,600 municipalities? Yes, but let us ask first what per cent or how many of these municipalities cannot be reached presently through landlines or by mobile phones? Twenty per cent? Ten per cent? Five per cent? The DOTC officials do not tell us, yet they insist on the NBN project to provide seamless (that word again!) connectivity. But my guess is that almost all municipal offices in the poblacion can now be reached by voice or text messages. And should there still be some remote municipal offices that are beyond reach, Government can require the TelCos for a timetable when to blanket the areas with cell sites. In fact, the Telcos do it without being told, when there is a need for it. It was only sometime ago when the former Philippine Refugee Processing Center in Morong, now the Bataan Technology Park, was a dead spot. Not anymore. Of course, there is no streaming video but do our barangay officials really need this Buck Rogers gadgetry now?
It was announced that the President has suspended the implementation of the ZTE National Broadband project along with the Cyber Education or Cyber Ed Program. In case it gets revived, we might as well ask of the $460 million Cyber Ed project: Is there no other means of transmitting the lectures of the “expert” gurus on various fields to all public schools including those in the remote rural areas, assuming this didactic approach is what our rural children need. Picture the malnourished children who can barely comprehend instructions from their teachers huddled in front of TV monitors listening to expert lectures on science, math, physics, history, etc. How many classrooms, books, feeding programs, and additional teachers can be funded by P23 billion? But should the DECS insist that our school children imbibe the edifying talks of our master teachers, how about burning their lectures in CDs? How much does a blank CD cost? Twenty (20) pesos? But if the Government buys in the hundreds of thousands? Maybe ten (10) pesos? Let us do some arithmetic: we now have 45,000 barangays, so we must have at least 45,000 barangay elementary schools. Add the High schools and elementary schools in the cities and poblacions and we may have a few thousands more, but for easier count let us assume we have 100,000 schools to send CDs to. At P10 per CD, that’s P12 million pesos a year assuming the DECS sends out CDs once every month. Add a few more million pesos for delivery costs and honoraria for the lecturers, shall we say P20 million pesos? Against P23 billion pesos cost for the Cyber Ed project, excluding operating costs? The CDs can be kept in the library and replayed as many times as necessary. Ah, but the DECS want the lectures broadcast so that they can be viewed instantly. Then, why not use the Knowledge Channel? Or should a month delay even be an issue? Would 2 plus 2 no longer be 4 after a month, or a year? Do the Laws of Physics change? How often does History get revised?
