Court asked to stop $330-M deal between DOTC, Chinese firm

Amsterdam Holdings Inc. (AHI), a local telecommunications firm, is set to ask the courts to stop the Department of Transportation and Communications (DOTC) from implementing the controversial $330 million broadband contract with ZTE Corp. as it is allegedly onerous and grossly disadvantageous to the Philippines.

AHI legal counsel Marinelle O’Santos said the firm is in the process of reviewing documents pertaining to the contract, forged last April 21 in Boao, China, which entails putting up a National Broadband Network (NBN) that would connect all government agencies and offices.

“We want to avail of every possible legal remedy possible,” O’Santos told The STAR. AHI is one of two rival proponents protesting the deal, the other being the US-based Arescom Inc. AHI and Arescom as well as the US Embassy decried the lack of bidding and the alleged lack of transparency in forging the ZTE deal.

“It’s going to be soon,” she said, referring to the lawsuit that would be filed against DOTC.

She refused to give more details of the legal action AHI would take as it might telegraph their moves even as she admitted the obvious tack of seeking a temporary restraining order (TRO) against the deal.

“That’s (TRO) the immediate one of course because we have to stop them from implementing this. We’re looking at a range of options,” O’Santos said.

She said up to now the DOTC has refused to give them a copy of the reconstituted contract after Assistant Secretary Lorenzo claimed last month that the originals were lost in a hotel room shortly after the deal was signed.

The AHI lawyer issued the statement after Arescom chief financial officer Scott Arey earlier expressed willingness to appear before any congressional investigation into the deal. Senators earlier warned they would inquire into the contract.

Arey also warned that US military aid to the country might be jeopardized if the deal would push through since ZTE has been known to have set up defense systems of so-called rogue states, including Iraq during the time of the late Saddam Hussein.

Arescom submitted a much lower bid of $145 million while AHI proposed a contract price of $245 million. AHI co-founder Jose de Venecia III, son of Speaker Jose de Venecia Jr. however said his firm’s proposal is superior of the other two since it will be privately-funded and will not involve any loan nor require a sovereign guarantee.

President Arroyo earlier ordered Justice Secretary Raul Gonzalez to review the ZTE contract but the latter said he is very careful in revisiting the deal because of the controversy.

Gonzalez however admitted that he himself does not have a copy of the so-called “reconstituted” contract.

Transportation and Communications Secretary Leandro Mendoza had expressed confidence that the contract would stand scrutiny whether in the courts or in any congressional investigation. Mendoza has maintained that the ZTE contract is transparent and is cost effective owing to its superior specifications and greater coverage.