Telecoms experts clash in DoJ’s NBN probe

By Jerome Aning - Philippine Daily Inquirer

The justice department’s probe into the aborted NBN-ZTE deal on Thursday took testimony from a National Economic and Development Authority official who said the proposal of China’s ZTE Corp. was a “good deal” and a technical consultant for the competing Amsterdam Holdings Inc. who countered that the AHI bid was better.

AHI head Jose “Joey” de Venecia III, did not show up at the hearing and sent instead consultant Richard Pratte, an industrial engineering and telecoms expert who was part of the team that drew up the AHI proposal.

Ruben Reynoso Jr., NEDA assistant director general, said that had the ZTE deal pushed through, the government would have saved P4 billion a year in communication and Internet bills.

Reynoso said the NBN-ZTE project would have been a potential revenue earner as areas not yet covered by commercial cell phone and Internet service providers could subscribe to the state-owned national broadband network.

Good return

He said the estimated rate of return on investment in the $329-million ZTE project of around 29 percent was favorable as the NEDA normally considered a 15-percent return as “a good figure.”

The NEDA official also clarified that the agency’s primary task was to “review and comment” on completed contracts submitted to it and that background checks were the responsibility of the implementing department or agency.

He said the NEDA evaluated the ZTE proposal at its value, adding that as a government official “he presumes everything was done with a presumption of regularity.”

Reynoso also said he did not meet the Senate’s star witness Rodolfo Noel Lozada Jr. to discuss the NBN project.

He said he knew Lozada “socially,” having met him several times at the NEDA office when Lozada would visit the then NEDA head Romulo Neri when the latter “felt a need to relax for while.” He said he did not know of any instance that Lozada intervened or exerted influence to push for the project.

Confidential info

Speaking to reporters, panel member and Justice Undersecretary Jose Vicente Salazar said Neri could be charged for leaking confidential information about the contract to Lozada.

He said the details that Lozada disclosed about the NBN-ZTE deal, including the proposals of ZTE Corp. and AHI, were considered confidential, citing a Malacañang memorandum banning the premature disclosure of details regarding government deals and provisions of the Revised Penal Code pertaining to infidelity in the custody of public documents and revealing trade secrets.

Salazar said that no document has been presented to the panel indicating that Neri hired Lozada as a consultant authorized to view documents on the NBN project.

“There seems to be no written authorization which would entitle Lozada to get a copy of these documents,” said Salazar.

Pratte said the AHI offer was more advantageous because no government loans or guarantees would be involved as AHI proposed to undertake the project on a build-operate-own basis. He said AHI’s rates would also be 25 percent lesser than the lowest prevailing rates. He said the company would earn income by offering its broadband services to private companies.

The $246-million AHI proposal also ensured government control of the security of all data transmitted via the NBN, Pratte said.

He said the AHI project would cover 57 percent of the country’s population, including those living in all chartered cities, all provincial capitals and all first- and second-class municipalities.

Pratte said he found it “strange” that the NEDA should consider AHI’s proposal as limited in coverage when it would be using 587 broadband sites against ZTE’s 300. With a report from Gil C. Cabacungan Jr.