DoJ says $330-M broadband deal legal

By Tetch Torres - INQUIRER.net

The Department of Justice (DoJ) has affirmed the legality of the $330-million broadband contract the Philippines signed with a Chinese company.

Justice Secretary Raul Gonzalez told the Department of Transportation and Communication (DoTC) that the proposed National Broadband Network (NBN) project could be considered an executive agreement, “provided that the loan agreement between the Philippine government and China Exim Bank is subsequently concluded."

He said executive agreements do not fall under Republic Act 9184 or the Government Procurement Reform Act requiring that "all procurement activities must be made through public bidding."

Lawmakers have questioned why the government settled for negotiating with a chosen company, ZTE Corp., rather than auctioning off the project as mandated by law.

They accuse the government of failing to consider the offers of other telecommunication firms amid reports that two other firms have offered to undertake the project at significantly lower costs -- Amsterdam Holdings with $242 million and Arescom USA with $135 million.

The DoTC is pushing the project as a means to cut government spending in telecommunications, which is estimated to be worth about P4 billion every year. The agency estimates that government can save around P3.6 billion in communications expense if the NBN pushes through.