SC votes 8-7 to stop NBN deal

By Leila Salaverria - Inquirer


MANILA, Philippines -- By a vote of 8-7, the Supreme Court Tuesday ordered a stop to the implementation of the $329-million contract for the National Broadband Network (NBN) project, which has been tainted with allegations of bribery, overprice and sexual favors.

The seven justices who voted against the temporary restraining order (TRO) were mostly new appointees to the tribunal, said a lawyer who asked not to be named.

Acting on the petitions of Iloilo Vice Gov. Rolex Suplico and Amsterdam Holdings Inc. (AHI), the tribunal issued an order temporarily prohibiting government officials from enforcing the deal with China’s ZTE Corp.

AHI, which offered an unsolicited bid for the project, and Suplico also sought to compel government officials to give them a copy of the contract and other related documents for scrutiny.

“Now, therefore, effective immediately and continuing until further orders from this Court, you, respondents ... and any and all persons acting on their behalf are hereby enjoined from ‘pursuing, entering into indebtedness, disbursing funds, and implementing the ZTE-DOTC Broadband Deal and Project’ as prayed for,” the high court said in an en banc resolution.

Congressional leaders have called for the scrapping of the controversial NBN contract, the subject of an investigation by committees in the House of Representatives and the Senate.

The NBN project is intended to connect government offices nationwide through landline, cellular and Internet services. It would be funded through a loan from China.

Supreme Court spokesperson Jose Midas Marquez said the respondents to the two petitions were given 15 days upon notice to file their comments.

The respondents include the National Economic and Development Authority and its former chief Romulo Neri; the Department of Transportation and Communications and Secretary Leandro Mendoza and Assistant Secretary Lorenzo Formoso III; the Commission on Information and Communications Technology and Chair Ramon Sales; ZTE Corp.; Arescom Inc.; the National Telecommunications Commission; bids and awards for information and communications technology committee, and the technical working group for ICT.

The high court, in a resolution released Tuesday, also took note of the entry of appearance of the Angara Abello Concepcion Regala and Cruz law office as ZTE Corp. counsel and granted its request to be given copies of pleadings, appearances and motions in relation to the case.

The $329-million contract was signed by Mendoza and ZTE vice president Yu Yong on April 21 in Boao, China, in ceremonies witnessed by President Gloria Macapagal-Arroyo. Hours later the Philippine copy of the contract was stolen in a hotel in China. It has since been reconstituted.

The NBN deal has been in the news over the past two weeks because of allegations of bribery and overpricing. Nueva Ecija Rep. Carlos Padilla accused Commission on Elections Chair Benjamin Abalos Sr. of brokering the deal and of receiving sexual favors from ZTE.

AHI cofounder Jose “Joey” de Venecia III also said Abalos offered him $10 million in exchange for backing off from the deal.

Abalos has denied the allegations, saying De Venecia’s statements were part of an attempt to mislead the public about De Venecia’s role in the NBN project.

ZTE has also denied bribing government executives to bag the contract.

Seen by only select few

Earlier, two economics professors at the University of the Philippines said the NBN deal was not necessary because of existing broadband networks operated by the private sector.

In their petition filed the other day, AHI and its president Nathaniel Sauz said the government was forcing the deal on the people despite the numerous questions about it, and despite the contract being seen by only a select few government officials.

“Very plainly, these parties, herein respondents included, are railroading the NBN-ZTE transaction, ramming it down every Filipino’s throat.

“The government is proceeding with this project with reckless abandon, impervious to the very valid concerns, criticisms, and misgivings already expressed before various fora during the past several months. Obviously, the parties interested in this transaction want the deal sealed, so to speak, even before anybody can raise a decisive howl.”

‘Rigged election process’

The petitioners also said that if the deal continued, Filipinos would be in debt for something that was not been studied well and to which they had not agreed.

Suplico said the high court should nullify the NBN contract with ZTE because it was entered into through “rigged selection proceedings,” and violated the procurement law and the build-operate-transfer law that require public bidding, and the Telecoms Policy Act that requires the government to privatize telecommunications facilities.

“The NBN project, under the contract in question, should be annulled and enjoined for preferring public indebtedness over self-reliant and self-liquidating private sector initiatives,” he said.

How they voted

A source said those who voted to issue the TRO were Chief Justice Reynato Puno, Associate Justices Leonardo Quisumbing, Consuelo Ynares-Santiago, Angelina Sandoval-Gutierrez, Antonio Carpio, Ma. Alicia Austria-Martinez, Conchita Carpio-Morales and Adolf Azcuna.

The seven justices who voted against the TRO were Renato Corona, Dante Tinga, Minita Chico-Nazario, Cancio Garcia, Presbitero Velasco, Antonio Nachura and Ruben Reyes.