Fait accompli

Vladimir Putin, each passing day, teaches other world leaders how to get things done by keeping diplomacy on the slow track and the army on the fast track.

Over the last week, he has almost discreetly inserted thousands of elite military units in the Crimea. Many of these units were advertised as “militias” drawn from the ethnic Russians residing in the contested peninsula. They have managed, however, to bottle up the Ukrainian Navy in their bases and surround the Ukrainian Army camps.

Early in the week, the Crimean parliament (Crimea is an autonomous region within Ukraine) voted to secede and rejoin Russia. Tomorrow, a referendum is scheduled where the matter will be put to a popular vote. These is hardly any suspense about the outcome of that referendum.

While the western powers ponder diplomatic measures to stifle Russia’s effort to annex Ukraine, including the cancellation of visas for officials involved in the secession, Putin’s troops moved in a staccato to seal the fate of Crimea.

In case the western capitals have not noticed yet, an invasion has happened. Russian troops have taken control of everything in Crimea. Only planes coming from Moscow are allowed to fly into Crimean airports. Public information is now tightly regulated by Russian authorities.

Russia’s annexation of Crimea is now fait accompli. It is a done deal. It happened in a matter of days without a shot being fired.

Call Putin pig-headed if you must. The fact remains that throughout this crisis he kept one step ahead of the rest of the world. Tomorrow, western diplomats will have to quickly shift (if they can) to a post-annexation reality.  

Sloppy

The senators were not happy with the way the DOTC conducts bids and awards contracts. That was obvious in the public hearing held last Tuesday on the controversial Mactan-Cebu International Airport (MCIA) makeover.

One senator summed up the DOTC’s work quite succinctly: sloppy.

As a matter of standard procedure, the DOTC bids and awards committee ought to conduct a comprehensive evaluation of the capabilities of the participating bidders. That must include a keen evaluation of its financial capabilities for undertaking projects of a large scale, the corporate track record and public evaluation of the corporation.

Because vital infrastructure projects are being bid out, where public safety is a salient concern, engineering capabilities need to be thoroughly evaluated. There should be no room here for carpetbaggers: corporations that strive to win contracts  with the intention of simply flipping the deal at first profitable opportunity.

The pre-qualification process for participating bidders is pretty much like the due diligence work undertaken by bankers on possible borrowers. In the case of the MCIA project, all the working committee doing pre-qualification of the bidders accomplished was a sparse 2-page report. No one at the DOTC even bothered to do an internet search on the corporate record of foreign companies participating as consortium partners of Filipino firms.

Senator Serge Osmena was aghast when DOTC officials admitted in the course of last Tuesday’s hearing they relied entirely on sworn statements submitted by the bidders. Undersecretary Perpetuo Lotilla, chairman of the bids and awards committee of the DOTC, appeared surprised when informed of the “Asset Light, Asset Right” strategy of the Indian conglomerate GMR Infrastructure.

Based on this strategy, GMR sold 40% of the company’s investment in the Istanbul Airport just 6 years into the contract period. This suggests the company might not have a long-term commitment to a major infra undertaking. Lack of long-term commitment to an infra project might, as Senator Grace Poe pointed out, lead to inferior engineering of the project.

In addition, there have been numerous reports abroad about the financial difficulties this company faced. None of those reports figured in the DOTC’s evaluation of bidders.

GMR is the foreign partner of upstart Filipino firm Megawide. This consortium is reported to have the inside track for the massive MCIA project.

In addition to the business strategy and financial disposition of GMR, the issue of conflict of interest was raised against it. GMR’s managing director sits on the board of a Malaysian firm participating in the same bidding as part of a rival consortium.

When Senator Bam Aquino confronted Lotilla about the conflict of interest issue, the latter replied that the matter was disclosed in the bidding documents. Mere disclosure, as Lotilla was forced to sheepishly admit, does not remove the conflict of interest.

Not only was the pre-qualification process frighteningly sloppy, the senators observed the DOTC itself did not appear keen in following the rules they themselves set for the bidding. Those rules dictate that violation of the conflict of interest provisions spells outright disqualification.

The DOTC’s sloppy handling of the bidding could translate into more delays for the vital infra projects stalled for years.

The officials in charge of the MCIA project, for instance, do not seem to be of one mind about the status of this undertaking.

In a separate hearing at the House of Representatives, the representative of the PPP seemed to suggest the bidding was a closed deal. She kept referring to the other bidders as “losers.”

The officials of the DOTC, for their part, appeared to be hedging, fully conscious of the many loose ends in the bidding process only now coming to light. They seemed to be suggesting, Lotilla in particular, that the post-qualification process is still on-going and that the process has not reached terminal point.

They really need some more time to clean up what has so far been a sloppy process.