Blacklisted firms still allowed to bid for state projects

MANILA, Philippines - The state has allowed construction companies recently blacklisted by the World Bank (WB) for questionable bidding practices to still participate in government projects as long as these are not funded by the multinational lending institution. This was disclosed Tuesday by Public Works Secretary Hermogenes E. Ebdane, Jr. in a hearing of the Senate economic affairs committee. Mr. Ebdane said E. C. de Luna Construction Corp., Cavite Ideal International Construction and Development Corp. and C. M. Pancho Construction, Inc. were only barred from undertake WB-funded projects that undergo a different bidding system as against those employed by the government. Committee chairman Senator Miriam Defensor-Santiago noted there is no preventive suspension nor penal provision under the Department of Public Works and Highways’ rules on the blacklisting of companies. She added this setup was "outlandish" and "extremely defective." Ms. Santiago asked Mr. Ebdane to revise the department’s rules "within 30 days" to reflect the necessary changes. Mr. Ebdane said they will comply with the request. WB has announced two weeks ago that it has banned the three Filipino firms and Chinese firms China State Construction Corp., China Wu Yi Co., Ltd. and China Geo-Engineering Corp. from bidding for WB-funded projects. The companies allegedly rigged the bids for the National Roads Improvement and Management Program-1 that involved a $150-million WB loan in 2000. Under the project, which was finished in 2007, 1,400 kilometers of roads were either built or rehabilitated. Its second phase would require $576.02 million and would still be funded by WB. Asked to confirm if there were collusive practices in the Public Works department, Mr. Ebdane told reporters in a chance interview after the hearing: "Who among us is really honest? All of us, in one way or another, is at fault." Eduardo C. de Luna, proprietor of E. C. de Luna, and Lamberto Lee, owner of Cavite Ideal, denied rigging the bidding of the contracts. Meanwhile, Ms. Santiago said her committee will recommend the removal of two Cabinet officials and the impeachment of the Ombudsman for "gross neglect of duty" in allegedly failing to act on the WB’s decision issues as early as November 2007. She said she will recommend to President Gloria Macapagal-Arroyo the dismissal of Mr. Ebdane and Finance Secretary Margarito B. Teves, and to the House of Representatives for impeachment proceedings against Ombudsman Merceditas N. Gutierrez. Mr. Teves did not attend the hearing due to a "prior commitment" with the House, while Ms. Gutierrez noted their proceedings are confidential until after a preliminary investigation has been concluded. Both did not send representatives, which irked Ms. Santiago. Ms. Santiago said the committee can come up with a report of its recommendations, noting that Tuesday’s hearing was an "exercise in futility" since the resource persons "stonewalled" and refused to disclose their participation in the scandal. If Mrs. Arroyo will not heed the committee’s recommendations, Ms. Santiago said the President will "assume full responsibilities before the Filipino people." First Gentleman link Meanwhile, First Gentleman Jose Miguel "Mike" T. Arroyo has been linked to the scandal, with Senator Panfilo M. Lacson saying Mr. de Luna met with President Gloria Macapagal-Arroyo’s husband "several times" in 2002. Based on appointment records, Mr. Lacson detailed Mr. de Luna’s meetings with Mr. Arroyo for at least 20 times, enumerating the dates, times and places of the meetings. Mr. Lacson said that he obtained Mr. Arroyo’s personal appointments book and that a witness, who he said was afraid to come out "for obvious reasons," can back his claims. Mr. de Luna denied we was close to Mr. Arroyo and that he met him only thrice through a common friend, former radio reporter Resty de Quiros who is now a director at the Philippine Charity Sweepstakes Office, one being in Mr. Arroyo’s office at the LTA Building in Makati City. "I just waited outside [of the room] and just said, ’Hi,"’ recalled Mr. de Luna during the initial meeting. However, Malacañang Tuesday hit fresh insinuations that linked Mr. Arroyo to the supposedly rigged WB-sponsored road projects, saying the claims should be backed up by evidence. Press Secretary Jesus G. Dureza said, "Unfortunately, the First Family had been dragged unduly. Remember they have been dragging the name of the First Gentleman many times over in the past but up to now there is no single iota of evidence that had been brought to court." Ruy Rondain, Mr. Arroyo’s lawyer, said in a statement, "The First Gentleman does not interfere and will never interfere in government matters and transactions." — Bernard U. Allauigan and Bernardette S. Sto. Domingo, BusinessWorld