BOC, PNR chiefs deny anomalies

MANILA, Philippines – The Bureau of Customs (BOC) said yesterday there was no overpricing in its $150-million x-ray scanning project and this should not be compared to the controversial national broadband network (NBN) deal.

Reacting to a claim by Sen. Jamby Madrigal that the purchase of 30 scanning machines by the bureau in 2006 was overpriced, lawyer Lourdes Mangaoang, head of the Non-Intrusive Container Inspection System Project (NCISP), said the x-ray units were fairly priced.

The x-ray machines were acquired from Beijing-based Nuctech Co. Ltd. through a government-to-government loan agreement with China.

“We are willing to prove this if there will be an inquiry, but we hope that we will be treated fairly, and that the issue will not be used for a witch-hunt,” Mangaoang said.

Madrigal earlier proposed an investigation of the Customs x-ray project, which she claimed was overpriced at $2.5 million each. The x-ray scanning machines used by the customs bureau in Los Angeles, California were bought for only $1.9 million, the senator said.

“We have heard that our good senator is calling (us) to question why a similar x-ray machine being used by the Los Angeles Customs in California was acquired only for $1.9 million, while our units are much more expensive at $2.5 million. The Nuctech model being used in LA starts with LH, while ours is a much later model (LT). The penetration level of our unit is much stronger than the unit they are using,” Managoang explained.

The BOC official argued that Madrigal made a mistake in comparing the BOC with the customs agency of Los Angeles.

She said that unlike LA, “the Philippines has 7,000 islands and 15 ports. We have one of the longest coastlines in the world. Actually, the 30 units we acquired are not enough to really secure the entry of goods.”

“Looking closely at the matter, LA has only one unit because shipments entering their country are already being required to undergo scanning before they arrive at US ports, so why would they need a lot of x-rays?” Mangaoang explained.

“The simple fact that they are using the same brand is enough proof. We have made the right choice in using these units to beef up our anti smuggling drive. The US is one of the most secure ports in the world,” she said.

Mangaoang said the NCISP cannot be compared to the scrapped NBN project because it is a government-to-government loan agreement, considered an international accord and exempted from the bidding requirements of the Government Procurement Reform Act or Republic Act 9184.

“Since this is a memorandum signed by the Government of the Philippines and the People’s Republic of China (PROC), there is no broker,” she said, adding that the Philippine government deals directly with the Ministry of Commerce of China and the bureau deals directly with the Chinese manufacturer.

Mangaoang said that the bureau also explored other alternatives before embarking on the project, but the G2G PROC/ Nutech proposal proved to be the most advantageous to the government.

Under the agreement, China will fund the acquisition and installation cost of the x-ray machines under a liberal financial arrangement with a maturity period of 20 years; interest rate of 2 percent per annum based on diminishing balance, and a five-year grace period on the payment of the principal.

The agreement also entails that the BOC will directly operate and maintain the x-ray machines with China providing the technology transfer through training and technical assistance. No loan counterpart equity is required under the agreement, with the PROC shouldering 100 percent of the total project cost, while 100 percent of fees generated will go to the Philippine government. 

Meanwhile, the head of the Philippine National Railways (PNR) also denied Madrigal’s claim that they had lost a copy of a memorandum of agreement (MOA) entered into by the agency for the South Luzon Railway (Southrail) project.

Jose Ma. Sarasola II, PNR general manager, said there was no MOA to lose since they did not sign anything with any entity in connection with the Southrail project.

However. Sarasola pointed out that they signed a memorandum of understanding (MOU) with two groups – China National Technical Import Export Corp. (CNTIC) and China National Machinery Import and Export Corp. (CMC) – for a feasibility study on the rehabilitation of the PNR’s southern Luzon line.

In a press statement, Sarasola said that he was puzzled over the “insistent demand” of the lady senator to produce a supposed April 27, 2005 MOA purportedly signed by the PNR and the China National Technical Import-Export Corp. on the construction of the Southrail project.

Madrigal said that last Feb. 20, the PNR chief claimed that they could not find the MOA signed on April 27, 2005 and that “it might have been lost.”

Her revelation reportedly led to the filing of a Senate resolution censuring the PNR general manager for the alleged loss or withholding of a copy of the MOA.

Sarasola denied saying that such a document might have been lost and stressed that there was no reason to cover up anything on the Southrail project.

“If she will bother to read again my second letter to her dated Feb. 20, 2008, the senator will realize that my statement is that we do not have a copy of the above-mentioned document or any other document which may be related to it dated April 27, 2005,” he said. “I advised her that what we have is a Memorandum of Understanding between the PNR and China National Technical Import Export Corp. and China National Machinery Import and Export Corp. signed on November 15, 2002. I also informed her that said MOU provides, among others, that CNTIC and CMC shall undertake the study on the feasibility of the project involving the upgrading of the PNR’s Main Line South and its extension to Matnog, Sorsogon. We even provided her with a copy of this MOU,” Sarasola pointed out. 

The PNR head said he was “very much disturbed” to read Madrigal’s accusations in newspapers that he was covering up or had lost the supposed MOA.

“We do not have a copy of the MOA that Sen. Madrigal is talking about. As far as we are concerned, such a document does not exist. So how is it possible for me to have lost or to be covering up on a non-existent document?” Sarasola asked.

“The senator is quoted as having said, in reference to us at the PNR, ‘They are either very mad or very bad’. We are very mad at this judgment based on a bad report given to the senator.”

“If her informant could produce such a document, we will appreciate it,” Sarasola said.

Madrigal recently caused a furor when she presented to media official documents on the national broadband network project that supposedly had a marginal note indicating that a copy was furnished to one “FG.”

Madrigal said that the document seemed to prove that the presidential husband was being given copies of government documents on the NBN project which was highly questionable.

Immediately afterwards, the National Economic and Development Authority (NEDA) declared that the said document was tampered with to show the initials “FG,” saying that the original document bore the initials “FGI” which stands for Florencio G. Igtiben, a technical personnel at the NEDA-Public Investment Sector office. — Edu Punay, Rainier Allan Ronda