Ex-DOTC officials may be questioned over $200-million satellite deal

MANILA, Philippines - Former officials of the Department of Transportation and Communications (DOTC) may again be put under scrutiny over serious anomalies in the bidding of the more than $200-million contract to install satellite-based communication, navigation and surveillance/air traffic management (CNS/ATM) systems for the Philippines’ airport network.

DOTC insiders said questions are being raised over the alleged “flawed” bid conducted by the DOTC and the former Air Transportation Office (ATO), allowing a supplier, Thales of France, to join and bag the contract despite its involvement in the alleged ghost delivery of a P1-billion Global Marine Distress Safety System (GMDSS) in the previous years.

It was learned that Thales bagged the contract as the joint-venture/sub-contractor of Sumitomo Corp. of Japan.

The CNS/ATM project, like the infamous national broadband network (NBN) project of the DOTC, is funded by an overseas development assistance (ODA) loan, and classified as a tied loan project.

Only a supplier from Japan can bag the contract because the ODA is being provided by the Japan International Cooperation Agency (JICA).

Thales, formerly Thomson CSF NCS-France, supplied the DOTC with the GMDSS in 1998, but failed to deliver the purchased equipment, which resulted to its being blacklisted by the Commission on Audit (COA).

Consistent winner

It was also learned that Thales has been a consistent winner in other equipment procurement contract biddings by the DOTC and its line agencies.

The latest contract it won was the installation of an instrument landing system (ILS) for the Ninoy Aquino International Airport (NAIA) bidded out by the DOTC’s line agency, the Manila International Airport Authority (MIAA) worth P189 million.

Former Sen. Manuel Roxas II had blamed Thomson CSF NCS-France for the string of sea tragedies that claimed hundreds of lives in 2008, including the sinking of the M/V Princess of the Stars.

The GMDSS is a ship distress and safety communications system designed by the International Maritime Organization and implemented in 1999.

Under the GMDSS, all passenger and cargo ships over 300 gross tonnage on international voyages have to carry specific satellite and radio communications equipment for sending and receiving distress alerts, and for general communications.

The DOTC embarked on a project for the installation of 19 GMDSS stations nationwide, followed by an international competitive bidding in 1997.

France’s Thomson won, and the supply contract — bundled with a loan of 106.53 million francs from the French government at 1.5-percent interest maturing in 25 years — was signed in 1998.

“Did the contractor deliver on their obligations, and if so, what happened to the GMDSS? If the winning bidder failed to comply, why didn’t the DOTC run after them? On the finance side, are we still paying off a foreign loan for an invisible GMDSS?” Roxas said in a statement, issued on July 14, 2008 condemning Thomson CSF NCS-France.

Roxas noted that a 2006 Commission on Audit report established that the contractor abandoned the project in 2000 “due to a billing dispute.”

It was learned that Thales also has a bad record in other countries and was brought to court by the Taiwanese government for giving illegal commissions to local officials in a $2.8-billion contract that would provide the Taiwanese navy with Lafayette frigates. 

The International Chamber of Commerce (ICC) International Court of Arbitration has since ordered Thales to pay Taiwan more than $591 million as settlement for the dispute.

DOTC: Investigation is ongoing

Meanwhile, DOTC Secretary Jose de Jesus confirmed that the department was already investigating the alleged irregularities in the CNS-ATM project, particularly the background of Thales and its connection to Thompson CSF NCS.

“We checked with the company if they have some bad record. They said they’re not the same person, they’re not the same company,” De Jesus told The STAR. 

He, however, said that the response of Thales was still being looked at further. “We’re still evaluating it. But that’s what we got.”

De Jesus also confirmed yesterday that Thales was also the winning supplier for the MIAA’s ILS project.

The DOTC chief said that the whole CNS-ATM project was currently under evaluation pending the check on Thales and the bid process conducted.