EDITORIAL — Transparency

The administration should not be surprised that the latest big-ticket government deal to be awarded to a private consortium is coming under heavy fire. Given the unresolved scandals of the past six months, every opportunity for fat commissions and other corrupt deals is being closely scrutinized by interested parties including the political opposition.

If the administration does not want another major project canceled amid allegations of massive corruption, like the $329-million national broadband deal with Chinese firm ZTE Corp., it should make transparency a hallmark of the privatization of the National Transmission Corp.

A consortium composed of Monte Oro Grid Resources Corp., Calaca High Power Corp. and State Grid of China beat a lone rival led by San Miguel Energy Corp. with a $3.95-billion bid the other day for the 25-year TransCo power grid concession, in a bidding supervised by the Power Sector Assets and Liabilities Management Corp. PSALM is headed by Jose Ibazeta, who is in charge of privatization in the power sector.

Ibazeta, according to opposition politicians, is also a director in several companies owned by Enrique Razon Jr., who heads Monte Oro. The opposition said Razon served as treasurer of the administration’s Team Unity senatorial slate, which was trounced in the elections last May. Sen. Jamby Madrigal also alleged that President Arroyo’s brother, Diosdado “Buboy” Macapagal Jr., has ties to Monte Oro. In the country’s weak corporate regulatory environment, such ties can be tough to establish.

If the opposition’s accusations are true, not only can Ibazeta be held accountable for conflict of interest, but President Arroyo herself could also face serious questions for the involvement of her brother, a first-degree relative, in a bidding for the largest privatization project in the power sector.

PSALM must still give its final nod to Monte Oro’s winning bid, and the consortium needs the nod of the opposition-dominated Senate to get a franchise. Administration officials insist that the bidding is aboveboard, but doubts persist. The best way to sell the TransCo deal to Congress and the public is through full transparency. It has been said often enough that those who have nothing to hide have nothing to fear.