Noy objection to deal is mainly engineering

CLARK FIELD (PLDT/WeRoam) — It looks final: President Aquino has cancelled the P18-billion deal with the Belgian firm Bagger-werken Decloedt En Zoon for the dredging and rehabilitation of the 950-square-kilometer Laguna de Bay.

The President himself did not say it, but his staff reportedly found that BDC misled the Department of Environment and Natural Resources, then under Secretary Eleazar Quinto, and the National Economic and Development Authority on the terms of the contract.

For one, the supersubsidy of P15 billion supposedly to come from the Belgian government turned out to be non-existent.

After review by Secretary Horacio Ramos, Quinto’s successor, the funding was changed from super-subsidy to a purely commercial loan worth P18 billion with Belgian bank Paribas-Fortis allegedly with a “gift” component of 25 percent of the contract price.

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IS IT GRANT?: It was not clear what the “gift” was. Why a gift and not a grant? When was it given and who received it? Then, why was the “gift” not written into the official loan agreement?

As I understand it, the correct process of securing a grant or loan from Belgium is not through the Belgian Export Agency (ONDD) but through Finexpo. How can that be when the budget of Finexpo for the year is way too short of the contract price of P18 billion?

When Ramos sought the opinion of the Department of Justice, then Secretary Alberto Agra upheld the contract as legal and enforceable. He viewed it as Official Development Assistance (ODA) and an executive agreement — therefore exempted from the law on public bidding.

Belgian Ambassador Christian Meerschman said that Belgium has no government-to-government contract and has not extended any concessional loan to the Philippines for the project, whereupon Ramos withheld the notice to proceed.

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LEGAL OPINIONS: Secretary Ramon Paje, upon taking over from Ramos, also sought a fresh DoJ opinion on the BDC contract.

Justice Secretary Leila de Lima followed her predecessor Agra’s line and looked at the contract as an executive agreement between the Department of Finance and the Belgian Export Credit Agency and in the nature of an ODA.

The Agra and the De Lima opinions ignored the fact that under the law governing infrastructure construction and development, dredging and reclamation are to be bid out — if they are not considered ODA.

Also, the two secretaries did not find applicable the procurement law requiring all government procurement of services and supplies to undergo competitive bidding.

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SKIMPY REASONS: The President’s statement on his scrapping the contract was so skimpy on the substantive reasons that a number of officials appeared confused whether or not his dropping the deal was final and definitive.

The other day, the President had to tell Laguna Lake Development Authority general manager Rodrigo Cabrera to explain his telling the press that the dredging contract for Laguna de Bay would be reviewed.

Cabrera reportedly told Laguna fishermen that “the project is not totally shelved, but he (Aquino) just wants to make some revisions to put in some more components.”

The LLDA chief may have been talking of the lake project’s being so important that it cannot be abandoned just like that, and not about the BDC contract which can be modified or replaced anyway.

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IT’S ENGINEERING: It appears that the President’s major objection is not legal, but engineering. He seems to labor under the impression that the project involves mainly the scooping out of silt from the lake and depositing it somewhere convenient.

Even plain folk will see that transferring the silt and debris to another part of the lake or a nearby dumping ground will not help. If this were so, the President is right in saying the project is a waste of government resources.

If that were the only work the contract calls for, the silting, pollution and related problems will remain or even worsen.

It is noteworthy that, in his statements, the President has not attacked the legality of the BDC contract. On the contrary, his own justice secretaries, two in a row, have officially opined that the deal is valid and legal.

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HOW TO DROP DEAL: If the BDC contract is legal and binding, may the Chief Executive simply cast it aside?

If the negotiation and the signing of the contract were marked by irregularities and if laws were violated — as in the aborted national broadband network deal with the China firm ZTE — proper charges should be filed.

The urgency of cleaning up and reviving the Laguna Lake ecosystem cannot be overemphasized. If the BDC deal stinks, it should be scrapped immediately under established due process and a better deal signed fast with whoever can offer one.

The President should lose no time elaborating on his objection and reexamine the narrow view that the P18-billion project involves just dredging and moving around the dirt.

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GIVE DETAILS: No wonder the environmental group Kilusang Lawa Kalikasan said the President was not properly informed about the project’s benefits. It asked the DENR to brief him.

The KLK said the President should have known that the silt to be dredged from the lakebed would be packed in geotubes to be used as sieves for the water runoff.

The group asked the DENR to inform the President of the contractor’s commitment to the rehabilitation of the Marikina watershed, which dumps more than four million metric tons of silt annually into more than 20 waterways emptying into the lake.

It noted that BDC has 100 years of experience in protecting Belgium from the onslaught of seawater and has completed similar projects in China, South Korea and Hong Kong without serious questions being raised.

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