I will liveblog the Senate ZTE hearing over at Inquirer Current starting at 2:30 pm.
Click here for the liveblogging coverage: Liveblogging the cootie grooming session.
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Hahahahahah! I’m so inclined to agree with you cvj, so inclined…
“…the move-on crowd’s philosophy of “los[ing] our freedoms and our rights just to move this country forward†has really paid off. Such efficiency!”
cvj, mbw,
Typically, the process starts with
1)the money: ” Pete, we have to meet asap, the fund I’ve been waiting for is already available.” actual quote.
2)the project: “Think of a project” citing ‘political specifications’ – optimal political impact of project.
3)the specifications: a process of adjustments from initial pre-bid specs to final specs to: a) fit in the “spread” into target cost of project b) disqualify other bidders on technicality.
4) the commision: More often than not official asks for advance of commission prior to final contract. SOP rigged bidding; SOP commission/kickback min 20%;
The whole process starts with the money and ends with his money.
Mlq3,
That is where I got my NPV, EIRR.
If the media can get these financial information why our esteemed senators can’t ?
As to he cost overlap, that is a very important point to look at because as stated in the news after changes in the assumptions, the project shows a positive net present value of .7 billion and a higher EIRR of 15.8 per cent.
For someone who prepares a feasibility study, he knows very well how to make a non-viable project to viable with the change in the assumptions.
That’s the hocus pocus of finance.
In this project, they included barangays which are already covered by another project. It’s double counting in terms of savings from another’s pocket.
Joey,
What you said there in a nutshell is how business with govt is effectively done.
Tell you what, when a foreign company that’s asked to participate in a bid gives his draft offer to his local “consultant” for say, 1 million dollars and is told by same consultant that it won’t do and to bloat it to 3 million dollars, the foreign company is perplexed and finds it extremely difficult to do so because they find it difficult to determine which item should be padded… It’s the consultant’s job to spot the item or items for padding. Believe me, very often, there’s loads of bickering that happens in that foreign company corporate hqs… because the engineers usually are against the practice!
joey, in my old job role, i usually came in at step #3b. i’m proud to say i wasn’t able to disqualify anyone with my technical specs except myself (accidentally of course).
mbw, in that case, think of the project’s impact on the country’s employment, especially engineers and technicians. often, public spending is good for a country to stimulate and nourish the economy. basic principles of economics tell us that employment generates consumerism which, in turn, propels more production of quality goods and services.
as in buying a laptop, you get what you pay for (unless you are a clueless sucker, a push-over for a scam). has anyone considered the cost of future obsolescence, and the ongoing maintenance to prevent it, or at least, prolong its useful life? maybe this item of cost is figured in the bottom line.
btw, joeydb, it appears, is nothing but a good, old-fashioned influence peddler – finagle a deal using connections in high places, then sell it and laugh his way to the bank. foiled, he decided to strike back, hitting whatever he considered most vulnerable – even with a dud for a weapon.
Bencard, i agree with your textbook description but basic economics also has the concept of opportunity cost. Why spend on ‘4G’ when you need classrooms more badly? Also, by setting up itself as a parallel telco, it is taking away business (and jobs) from the existing Telcos.
The Ca T,
“That’s the hocus pocus of finance.”
Fund source: loan classification, budget, release,
Payment: automatic appropriations
Hocus focus all throughout?
Chiz pointed out the unlawful IRR of the Procurement Law Andaya authored. I suspect the loophole was deliberate and not an oversight. Andaya looked very much the culprit when Chiz got back at him with the book. See isn’t he one of Team GMA’s Financial Operators?
Bencard,
Re “mbw, in that case, think of the project’s impact on the country’s employment, especially engineers and technicians. often, public spending is good for a country to stimulate and nourish the economy.”
I fully agree with you – no reservation there at all if that were the case but this is not the case at all.
The cost for that portion of the project that generates employment locally is not a problem at all if only the bolts, the nails, and the rivets were not being charged 1,000 times their genuine costs abroad.
In effect, the practice of charging billing a management report for an unbelievably exorbitant price is what drives the costs and not the salaries of the technicians, engineers, labourers in situ!
The fellow or the group that submits the costly report needs to charge so much for that report in order to share his “revenue” with the rest of the guys at the higher echelons in govt.
That’s basically how foreign companies thwart the Ricoh law by paying the local partners for a report at an exorbitant and unbelievable fee.
Actually, the Americans started this sort of practice in Pinas – in order to be able “to pay off” people in Pinas for the govt project involving equipment and engineering services they sell, they course the pay offs through their local partners, reps by making this company to bill them by submitting mandatory regular reports to a tune of sometimes millions of dollars…
cAt, the simple and honest answer is, too many senators have a baranggay police station cop mentality and not enough of a senator’s mentality. i’d reckon 90% of the basic establishing facts questions asked so far wouldn’t have been asked in, say, similar hearings in the states: they’d have established those facts and zeroed in on the really damning questions.
but also, to be fair, things are moving too fast. complete staff work for an educated discussion would require a 2 week hiatus for a proper timeline, digestion of documents, etc. in that time, anyone you want to pin down would have had ample time not only to get their stories lined up with their co-conspirators, but also destroy/suppress evidence.
per report!
bencard,
I’m sure you are aware that’s how you start big business with RP gov: find an old fashion influence peddler.
Most of the close and extended relatives of people in the highest echelons of power, when they want to do major business particularly with big foreign companies, start off as influence peddlers…
The bigger your project, the more expensive the peddlers become because they are right on top…
TDC,
wala ako dun,……. di ako kailangan dun.
maniwala ka tv at liveblogging din ako umaasa. pag me na miss ako sa tv,livelogging… rewind lang by page up ang kailangan tulad ng sinabi ni brian b
It’s not. As stated in Article 29 Post Warranty of the NBN Contract with ZTE:
“The Contractor may, upon payment of mutually agreed prices, provide maintenance and technical support to the Purchaser in respect of all the Equipment and Services for at least three (3) years after the expiry of the relevant Warranty Period. The said post warranty services may include repair of boards, PC boards, and other components, modifications of the Software, supply of spare parts, and other maintenance and operation support required by the Purchasor.”
In appears that ongoing maintenance is one of those items that is not included in the main contract. If it’s 10% of the equipment cost, then that’s 20Million USD a year or 340Million USD for 20 years (years 3 to 20). The government does not seem to have a view of Total Cost of Ownership.
cvj,
in effect, govt should have ‘costed’ this particular item in their cost assesments because very often, contracts with foreign companies do not include the provision with respect to “providing maintenance and technical support to the Purchaser in respect of all the Equipment and Services for at least three (3) years AFTER the expiry of the relevant Warranty Period.”
That’s why there is usually a huge training cost provision in the contract during the implementation period of the project …
to enable the buyer to come up ultimately with its own qualified corps of engineers and technicians…
I wonder if there was a provision at all in that ZTE contract that required ZTE to effect some transfer of know-how, one step towards transfer of technology.
MBW, yes. Same goes with the ‘Managed Services’ portion which ZTE provides only for the first 18 months. Usually, these two items – maintenance and ongoing operations are the largest cost items over the life of the system.
Absolutely cvj: Usually, these two items – maintenance and ongoing operations are the largest cost items over the life of the system.
You mean it wasn’t ‘costed’ as a lifetime cost? Whew!
Seems to me that this deal is really less than half-baked.
MBW, from what i read in the 39-page contract, these items are not costed in. (I’m still waiting for the Annexes to be available online though for a more complete picture.) Even the bill of materials of the equipment itself looks half-baked. In Article 5 Bill of Quantities (BOQ) of the contract:
“…The Priced Bill of Quantities shall be revised in accordance with the actual requirement of the project to be determined and approved by the Purchaser and the Contractor during the detailed engineering stage…”
This clause is standard for us vendors and is a fair one because one should not commit something if the requirements or design is not finalized. If the Customer accepts it, then well and good. However, for the government representatives to go on TV and quote ‘cost savings’ without knowing the full cost is misleading the public to say the least.
mlq3,
“ample time not only to get their stories lined up with their co-conspirators, but also destroy/suppress evidence.”
The public have learned to factor that in, they won’t buy GMA’s story, whatever, however. Opportunity lost, you mean, but isn’t that, on the other hand, presumptuous?
And how would you factor in GMA’s all out transparency, cabinet attendance, covered live 3 gov stations?
I’d consider it a Calibrated Pre-emptive Response to the crisis. A calibrated pre-emtive transparency. Learning from Erap’s second envelop, she opened the ‘second’ envelop. That was a crucial timely move. Weren’t many surprised? Would you admit? Isn’t that move worth analysing?
1)Is the ZTE ‘second’ envelop really a dud/empty?
2)Or is it ‘in process’ empty given the “ample time”?
cvj,
“However, for the government representatives to go on TV and quote ‘cost savings’ without knowing the full cost is misleading the public to say the least.”
More than misleading if I may say, because how can you determine all these costs in less than 3 days?
On March 26, 2007: “special joint meeting†of the NEDA Investment Coordination Committee, Cabinet Committee and Technical Board,
The ICC-Cabinet Committee and Technical Board of NEDA had serious doubts about the “economic viability†of the project. Too, they wanted to be further assured that it would be good for the government to have its own backbone, rather than use private sector services.
On March 29, 2007, the NEDA board approved the project,
rewind a bit on the three telcos recent history
It is the top two celphone telco that are driving the prices up…then comes sun their
literal duopoly wanted to gang up on this new entrant,although gokongkwei is not new in telco but in cellular he was at that time.
when that telco o offered free text the two cried foul,but its a good thing the old man is not a push over,and is willing to go head on with the two.
a typical lemonade stand competition aplication done by the old man.
__________________
what are we missing here:
cellsites being bombed,pay or blow.
if the technology would still be L.O.S. then same old story,pag tinoyo rebelde o sinumang totoyoin sasabog cellsite wala aamnin.
———————————
Anna de brux or mbw,
I know you know what you are talking about,especially with your work with NATO etc,etc.
Or maybe DoTC already had determined it between Oct 2006 and March 2007.
The best is for govt to submit the entire contract including the annexes for scrutiny without delay.
cvj,
I still haven’t downloaded the contract. Frankly I’m only half interested in the body of the contract if the annexes aren’t included.
The details contained in the Annexes could easily serve as the backbone of comparisson.
The body of the contract usually is standard for any foreing company operating in high tech sales.
main body that is…
MBW, i agree.
joey, definitely, it defused tensions and bought time, and in both cases, perhaps crucially. it prevented one collision (over eo 464) in the sc, which would have been counterproductive considering the zte contract is now pending before the supremes.
Karl,
I know some but not all … my friends over here know lots lots more and can ask them to help out with comparisson.
mbw, cvj, has here been a thorough scrutiny of each particular item of cost to prove overprice? (i realize, you are being facetious with respect to bolts, nails and rivets to prove a point, mbw) but maybe this is more perception than fact. the telcos may do the job, cvj, but are they willing to do it in exchange for government’s i.o.u.’s? otherwise, where will they get the funding, usaid, japan, the world bank?
beancurd, didn’t mean to ignore you. just to clarify certain of your misimpressions, i am not exactly a foreigner. i live and work (and partly educated) in the u.s. but i am as filipino as you are, in blood as well as spirit. my mother country may be out of sight but never out of mind (thanks, mlq3). i follow practically anything and everything that happens to my country and people. i share their joys and their pains, and still hope that they will become great, as rizal envisioned them to be over 200 years ago.
i don’t presume to lecture you on the rule of law and due process in every democratic society. their observance is a collective responsibility of everyone, for his own ultimate good. i don’t know what your personal problem is with the rule of law or due process, but i think the likes of jinggoy and the “batasan five” (as well as joma in neitherlands) have now a better appreciation for it.
to be honest, i actually resent your unfair insinuations that i am of the “makapili kind” betraying illegal ofws for a reward. fwiw, i earn part of my living helping people with visa problems. surely, i could not remain a lawyer for 41 years if i went around denouncing clients for being illegal aliens to get reward.
one more thing. will you just speak for yourself rather than pretend to be the spokesperson for everybody by using “we” insted of “i”?
Karl,
Garec is perfectly capable of doing the benchmarking were hi-tech is concerned. He’s already in situ, govt folks don’t even have to consult other parties abroad.
Bencard,
Agree, I was being a bit facetious to drive a point but other than that, all you have to do is give the contract on line even a cursory look to show that govt has not properly done its job.
I do realize that you being a lawyer, you want all ‘allegations’ to be backed up by tangible, irrevocable, irrefutable proofs of wrongdoings to prove that wrongdoings were committed – and that is all in yor honour, agree totally – but you must admit that it is not easy to do that if gov hides things and don’t allow the examination of the complete paper work; just the same, even with the really meager 39-page document that involves a multi-million dollar hi-tech project (a contract, which I suppose they pieced together because the original was declared stolen) thanks to cvj, we gain insight on how gov assessed the costs, not very well…
That alone now shows there’s been gross negligence in the handling of the project. Actually that’s why there’s bidding – bidding of projects, PARTICULARLY those that involve hi-tech is one way to avoid or prevent suspicions.
Factoring that in and added to that, the knowledge of how or the environment within which goverment projects are formulated, contracted, implemented as can be gleaned by the Abalos-JdV&son-Mendoza problems, NEDA minutes, etc. – not quite above board, there is strong basis to believe that this particular govt project is not at all corruption free.
If the gov can prove that this is above board, finance wise and whatever, then fine but I doubt they would be able to prove that.
Very difficult to do that when a project to be implemented is basically half-baked.
A contract of this size (amount) should total more than 39 pages. The 100 m $ dollar radar deal alone for NAIA totalled more than 2 volumes of at least 200 pages each (annexes, etc. included).
That did not include all the sub-annexes.
Medyo mahirap din sundan ang discussion dito kailanagan talagang titukan para maiindtindihan lahat. Which is not really posible for person like me na pasilip silip lang sa live blogging…
I do like the excagerates of CVJ, Cat, Brian, Bencard and MBW and the rest. Although I still dont like pasingit singit na pasaring ni CVJ sa Move on Crowds and the attribution of Austeros statement made 3 years ago to the current scandal. But Oh well that is CVJ forever bitter for not having his great ideas implemented.
Anyways reading through the comments still it doesnt answer the basic question.
Is it a contract or government to government agrement. As far as overpricing and the other technical issues. I have to go with CaT. We need the exact figures for that. It sgood that CVJ is pointing out some contrversial provisions of the contract. But, Bencard can you find a time to also read the contract or whatever documents available online. I believe it woudl be very enteresting if you can share your inputs on every provisions of the contract. If only you got time. Its just that its not possible for me to do it at this time. I myself have as many as 10 job related contracts in my desk that needs perusal…
BTW CVJ, do you the links for the NBN contracts?
To my knowledge an agreement is a contract, Rego.
Oh nver mind, I saw the contract already from Inquirer,net. But how do you enlarge. Its really unreadable for me. I tried clicking the page but it just make it even smaller….
Hahahah – “I tried clicking the page but it just make it even smaller….”
That happened to me yesterday… but cvj said that it can be enlarged.
It’s a contract at the point when it was signed by Mendoza but at the same time an executive ageement in process.
It’s a creeping executive agreement, a creepy one.
But the legal proceedure differs.
A Contract that is a pre-requisite of an executive agreement. An ODA but not treated as ODA.
What mutant of a contract/executive agreement is this? Gee.
Like a Chameleon, changes color as it gets along. For a while it was even an invisible contract!
This entity must be exterminated immediately.
Rego, i had to right-click and then ‘Save Picture As’. After that, i opened the contract with Microsoft Photo editor. However, a commenter also advised me that you can click on the zoom icon that appears on the lower right of your screen so you can enlarge the image.
Rego.
somos is the upper class term for tayo-tayo. it’s spanish because omce upom a time mestizos ruled. im a way, to say somos is to identigy yourself as established as opposed to nouveau. It refers to the old families.
Everyone else is otros or aquellos – others or them.
And this brings us to JPE’s attack on Joey’s access. Putting aside the fact that JPE himself got his start because his father was a rich and well connected person, we can look at access as an integral part of somos or tayo-tayo.
Access is part of our culture. From the barrio to the city it’s about access. The person who complains about Joey’s access is probably the same person who uses his access to his barrio captain. There is really no qualitative difference here. It’s the size that offends us, Joey’s access is national the other’s is local. But scope does not make one less evil or more good.
It’s Konek. Whether in the Philippines or any other country in the world, the game is Konek. It’s how amd for what purposes one uses that Konek that determines its morality. So unless proven otherwise we cannot attack Joey for taking advantage of a blood Konek unless, to use Bencard’s words, we can prove he used his Konek in an illegal and immoral way.
So to me JPE’s attack on Joey’s Konek was not only facetious, it was also hypocritical.
MBW,
I know you and my oldman go a way back….but he is already spreading himself too thin,that is why timing ang na isip ko na why not hire me as his assitant.
But one thing that made me proud of my dad during that telethon that they kept on citing is the Abaya vs Ebdane case where my dad assisted his “mistah” in digging deeper in that one,and he is no lawyer.I recall the whole class 59 filed a suit vs ebdane et.al
I meant the SC decision abaya vs. ebdane:[G.R. No. 167919, February 14, 2007]
as for the little help my dad to contribute to this country behind the scenes,and helping friends seems to be his calling.
re: for his capabilities in current ict technologies, I can say that on his early years as an officer, he was assigned for the computerization of the afp,but that was three decades ago…..
Ako lang yata kulang bilib sa oldman ko eh. All the feedback I hear from those who know him like you, is all good.
Rego,
By the way, there are somos within somos.
“I meant the SC decision abaya vs. ebdane:[G.R. No. 167919, February 14, 2007]”
I know this was later dismissed by the supreme court but it still gave us the guidelines and a second look on loan agreements and awarding of contracts and procurement.
In English, ‘not somos’ is “not one of us”…
Where’s my post reply to Karl’s?
Mlq3’s blog is refusing to post my message to Karl – hmmm… never mind, will try tomorrow!