Making hard decisions

It was gracious, if not unprecedented, on the part of the Ayala-Aboitiz tandem to assure the government they can go ahead and award the Cavite-Laguna Expressway (CALAX) project — either to a new winning  consortium or to disqualified bidder — without worrying they might resort to legal action to stop it.

This after President Benigno “Noy” Aquino III himself announced earlier the government’s plan to rebid the P35.4-billion CALAX project being undertaken by his administration’s Public-Private Partnership (PPP) program.

President Aquino intimated the possible rebidding of the CALAX project during a question-and-answer forum with the Foreign Correspondents Association of the Philippines (FOCAP) held last month. The presidential disclosure, however, stirred up not only the affected parties but most especially the local and foreign businessmen and investors and the diplomatic community here as well.

Immediately after President Aquino made the off-the-cuff remarks, the tandem of Ayala Corp. and Aboitiz Land Inc. — in a joint venture deal under the name Team Orion — protested the possible re-bidding of the CALAX project. Team Orion has every reason to protest because they submitted the declared winning bid of P11.7 billion.

The latest official word from Team Orion at least took some of the tension away. But this did not make the CALAX problem go away.

In fact, the Ayala-Aboitiz tandem’s move has merely created a funny situation. Here are the scenarios:

If the government would award the project to the disqualified bidder, there will be no howl and no legal recourse, as promised by the original winning bidder. But the howls of protests would surely come from the investor community, local and international. Already, these were manifested in position papers from the most vocal groups among foreign chambers that came out in the media since then.

Now, if the government awards it to the winning bidder, we don’t think the disqualified bidder will take such decision sitting down. Perhaps, they may also finally say they will respect the President’s decision. But just to make it believable, this should be accompanied with a legal “quit claim” in writing similar to what the Ayala-Aboitiz group officially declared.

Funny? But this can happen only in the Philippines. Keep in mind, it was only the original winning bidder which has assured the government they “will not take legal recourse” no matter which way the final decision of President Aquino goes.

So, the problem is not solved. It may have made the dilemma simply more glaring.

It is clear that the move of the original winning bidder was not the key to the solution.

The view is that Department of Public Works and Highways (DPWH) Secretary Rogelio “Babes” Singson remains the key. This PPP project is being done on Build-Operate-Transfer (BOT) scheme under the DPWH supervision.

In an official statement, Team Orion cited with great satisfaction the bidding process on CALAX project done by the DPWH was “conducted aboveboard, transparently, and within the framework of the BOT law.” As I’ve previously said, this was the best testimonial for DPWH Secretary Singson whose agency was once notoriously known in the past for rigged bidding and other corruption-tainted infrastructure deals. The charismatic leadership of Singson since he took over at DPWH from day one has apparently succeeded to exorcise his agency from ghost deals of the past.

However, Singson has inexplicably stayed away from the fray. This indeed is baffling. It may be time for the Palace to put this row back to the good Secretary’s hands. This may be just too hot for President Aquino himself to handle. With just one and a half years left of this administration, such flip-flopping certainly does not play well for P-Noy.

At the end of the day, the Palace’s options may not be what the Ayala-Aboitiz’ Team Orion proposed.
The most viable option is to uphold Singson’s earlier decision on the CALAX row, or to just dump him.

There are two things we can associate Secretary Singson with. First, he is one of the best performers in the Aquino Cabinet and arguably one with the highest credibility and is known for his abide-by-the-rules stance. Second, Secretary Singson stands by the decision to award the CALAX project to the original winning bidder despite the initial actions taken by the disqualified bidder.

It appears the key is to put this issue back in Singson’s lap and let him take it from there.

 Singson will then have to deal with the two available options. If he stands by his earlier decision to award the project to the original winning bidder, then he will just have to take two subsequent actions. The first is to explain to the public what that “P8 billion” story being peddled by the disqualified bidder is all about. The second is to prepare for the eventual lawsuits that may come his way.

Here is where the Palace can bank on Singson’s credibility. Maybe, the good Secretary can find a way to explain how a PPP contract can be awarded to a bidder which had been earlier disqualified. Maybe, he can explain it in the light of rules and procedures. Maybe, the investor community can buy whatever pitch he can come up with.

The point is the Palace may be missing out on the key to solving the CALAX row. The magnanimous gesture of the Ayala-Aboitiz’s Team Orion is not the key. And neither is that plan to simply rebid the project

The key is Secretary Singson, with his track record and credibility. He can take both the heat and the flak which may come government’s way in the aftermath of a final decision on CALAX. Worse, this will directly hit President Aquino who, in the first place, created this mess.

There is a major downside to keeping Singson out of the picture on the CALAX row and leaving to the President to make the final decision.

If the President decides to pursue plans to rebid CALAX without Singson, then he will not have his most credible Cabinet official to help him explain such decision. If the President decides to award the project to the disqualified bidder, then that would be tantamount to making a decision to junk Singson permanently.

The issue does not simply involve a choice between the original winning bidder and a disqualified bidder. Part of the issue is whether or not the Palace is ready to lose the most credible member of the Cabinet at this point. That’s the more difficult decision.