Gov't junks rural phone program

The Economic Coordinating Council (ECC) has decided to shelve the P53-billion Municipal Telephone Development Program (MTDP), saying that the private sector is doing a fine job of meeting its commitment to roll out land lines under franchise agreements with the government.

In its meeting this week, the ECC concluded its discussion on the MTDP which involves the establishment of public call offices, with private companies as partners.

According to Finance Secretary Jose Pardo, however, the decision was to discontinue the program, a move that would save the National Government P53 billion in loan guarantees.

Pardo said the ECC studied the program and made a decision based on the recommendations of the Department of Transportation and Communications (DOTC).

Pardo did not give further details, but according to a Cabinet official, the ECC also decided that all contracts that have so far been executed under the MTDP would be subject to a comprehensive review to determine whether these would be honored or rescinded.

According to the official, about P17 billion worth of contracts have already been executed with different private companies and some have already established the call centers as per their commitment under the contracts.

Since the project has been junked, the official said other contracts that have not yet been bid out will no longer be bid out. He explained that under the program, these contracts should be bid out by February so the DOTC will now simply allow the deadline to lapse.

"The most objectionable thing about this program is that the ending cost per telephone line was exorbitant," the official explained. "If we see that the existing contracts were not in the service of public good, we would rescind them."

The official admitted that government can no longer do anything about MTDP that have already been completed, but it could still go after the officials who allowed spurious contracts to push through.

"This program would have required government to spend P53 billion that it doesn't have," the official said. "The private sector is doing a good job meeting its commitment to roll out land lines, the government doesn't have to finance its own roll out program using inferior and obsolete technology."

Under the law, telecommunication firms were given franchises for cellular telephony but they were required to roll out land lines in different franchise areas.

"The only company that didn't meet its commitment was Islacom but otherwise, this scheme was a success."

The official noted that the MTDP was conceptualized at a time when there was only one service provider, namely Philippine Long Distance Telephone Co (PLDT), which did not have the resources to meet the national demand for telephone lines despite its size.

"Now that we have a sector with a healthy number of competing service providers, this program no longer makes sense and the money it requires is better spent on other programs," the official said. -