PCSO junks P42-billion deal with Australian firm

MANILA, Philippines -  The Philippine Charity Sweepstakes Office (PCSO) has junked a P42 billion 50-year joint venture agreement that would establish a thermal coating plant for the production and distribution of thermal coated paper for lotto tickets.

Director Maria Aleta Tolentino said yesterday that the Dec. 4, 2009 joint venture agreement with Australian-based TMA Group of Companies for the production of thermal paper has been declared null and void under PCSO board Resolution 118 Series of 2011.

PCSO chairman Margarita Juico, Francisco Joaquin III, Aleta Tolentino and Betty Nantes, approved the PCSO board resolution.

The resolution cited the opinion of the Office of Government Corporate Council (OGCC) which declared that supply agreement in guise of contractual joint venture is void and non-existing because it is undertaken to circumvent Republic Act 9184 in the procurement of supplies and evaded COA audit.

The resolution also revoked an earlier Resolution 2171 Series of 2009 which approved the   50-year P 40 billion deal.

Tolentino said the mandate of PCSO is limited to fund-raising for charity from horse races and lottery and not on the production for supply of thermal papers for lotto tickets.

“As far as the PCSO board is concerned the contract did not exist” she said.

The thermal paper supply issue was the subject of a privilege speech by Bayan Muna Rep. Neri Colmenares who exposed various anomalies in the PCSO during the previous administration.

Colmenares also exposed PCSO’s alleged anomalous contract with lotto machine supplier, Philippine Gaming and Management Corp. (PGMC)-Berjaya.

He said the PCSO in 1995 leased 3,525 lotto machines from PGMC-Berjaya and paid it with 4.3 percent of gross lotto sales generated with the use of such machines.

He said the charity agency had the option to buy the machines for P25 million at the end of its eight-year contract with its supplier. But PCSO opted to renew the lease at 6.85 percent of gross sales plus three percent for telecom services and .15 percent for maintenance and repair, for a total of 10 percent up to 2015.

In 2009 alone, he said the PCSO grossed P27 billion in lotto sales and paid PGMC-Berjaya P2.7 billion for the machines.

Between 2001 and 2010, the agency gave away P12 billion to its supplier, he added.

He also questioned the contract for the supply of hand-held small town lottery (STL) machines by Korean firm Ubicon.

He claimed that the gadgets cost only P7,000 apiece but were sold to STL operators for P40,000, or an overprice of P33,000.

“These STL operators should immediately file criminal and civil cases against the entire PCSO board for anomalously forcing them to purchase overpriced handheld STL machines,” he said.