Motion questioning ZTE deal not yet moot - Supreme Court

The Supreme Court on Wednesday said it will wait for a proper pleading to be filed in court before it can declare a petition disputing the contract for national broadband network (NBN) project moot and academic. Court spokesman Jose Midas Marquez made the statement after President Gloria Macapagal Arroyo scrapped the broadband project. "The Court will have to wait for an appropriate pleading or manifestation to be filed before it could react. The resolution will depend on the manifestation," said Marquez. Acting Justice Secretary Agnes Devanadera said she is still waiting for a formal directive from Malacañang before filing a manifestation before the high court. "I’m waiting for the President to return. I need a written instruction because we will be submitting that to the Supreme Court," she told reporters. Devanadera downplayed talk about the delays in the decision of the Palace to discard the deal, adding that Mrs Arroyo and Chinese President Hu Jintao have mutually agreed in maintaining good diplomatic ties even without the contract. She added that the consequences of the scrapping of the NBN contract will have to be submitted to the sound judgment of the tribunal. The Office of the Solicitor General, which Devanadera also concurrently heads, earlier filed its comment before the Supreme Court seeking the dismissal of the two petitions questioning the NBN contract with ZTE. In her reply, Devanadera claimed that contrary to the position of petitioners Iloilo Vice Gov. Rolex Suplico and local firm Amsterdam Holding Inc. (AHI), the original proponent for the project, the government even stands to gain from the Chinese contract. The OSG sought to belie allegations that the NBN project is irregular, unnecessary, excessive, extravagant, or unconscionable expenditure." Devanadera pointed out that at $330 million, the ZTE's proposal emerged the cheapest when overall project cost is matched against the other proponents in terms of actual construction of the project and delivery of a wide range of facilities and equipment. She said that the government chose the Chinese firm over other proponents AHI and Arescom Inc. for the NBN project because its proposal matches the government's objective. The government’s goal is to construct and operate its very own national network that will serve the Information and Communications Technology (ICT) requirements of all government agencies, she said. On the other hand, AHI's proposed project seeks to create a privately owned broadband and cellular network to provide cellular phone services to the public while targeting government as its main subscriber. Arescom merely seeks to put up a satellite-based network connecting the Department of the Interior and Local Government and selected local government units only. Aside from these, Devanadera said the ZTE will cover almost entire country while AHI will cover only first up to thirds class municipalities. Arescom, on the other hand, will be limited only to 21 selected regional centers. The OSG noted that ZTE is a recognized player in the integration of telecommunication systems and is the largest listed telecom company in Hong Kong and Shenzen stock exchanges. It is also known as China's third largest telecom giant. AHI, on the other hand, is a holding company with no experience in telecommunications and no verifiable technology partners. It also failed to specify how it intends to finance the project, Devanadera said. Devanadera also said the NBN project to be undertaken by ZTE and funded by the Republic of China through the China Export-Import Bank is a valid executive agreement not covered by the Government Procurement Reform Act and the Build-Operate-Transfer Law (BOT). Under the agreement, the NBN project will be financed by Eximbank of China under preferential terms of three-percent annual interest and 20-year repayment period inclusive of five-year grace period. The OSG also said none of the laws cited by Suplico prohibits government from providing for its own communication requirements, the OSG said. It added that the NBN project intends to "pave the way for more efficient and effective services, billions of pesos in government savings annually, unimpeded access to information, communication and integration from the farthest region in the South to the northernmost tip of the country." The OSG also said Suplico has no legal standing to file the cause due to his failure to show any direct injury or substantial interest in it. She added that the vice governor is not a party to the contract, which is covered by a valid executive agreement between the Philippines and China. The petition also cannot be considered as taxpayer suit since Suplico failed to claim that public funds were disbursed in connection with the implementation of the NBN project, she said. Neither can petitioner AHI properly claim standing as a taxpayer as there is yet no disbursement of public funds to restrain since the Philippine government has yet to fulfill certain conditions precedent for the loan-funded NBN project to take effect, the OSG said. Devanadera said the petitioners' plea for the issuance of writs of prohibition and mandamus are not warranted since the broadband contract has not yet been perfected. She said the implementation of the contract is still subject to several conditions and that among the requisites, only the issuance of a legal opinion from the DoJ had been complied. Last September 11, the Supreme Court issued a temporary restraining order enjoining government agencies, such as the National Economic Development Authority and the NEDA-Investment Coordination Committee, Department of Transportation and Communications and the Commission on Information and Communications Technology from implementing the ZTE contract. Suplico in his petition said the NBN project was actually a "lutong-macau" for violating existing laws and jurisprudence and is inconsistent with government policies on public transparency, accountability and self-reliance. Suplico's petition was filed a day after the Department of Justice gave its conditional approval to the controversial project. The former lawmaker from Iloilo also said the multi-billion peso contract between the DOTC and ZTE should be nullified for violating Section 20, Article VII of the Constitution, which states that sovereign loans and guarantees require the prior concurrence of the Monetary Board, the governing body of the Bangko Sentral ng Pilipinas. He further said the transaction was carried out without a public bidding, contrary to Republic Act 9184, or the Government Procurement Reform Act, which requires competitors to submit their bids simultaneously via internet on a specified date and time. The deal, Suplico said, also violates the BOT Law, which provides that in case of unsolicited proposals "no direct guarantee, subsidy or equity is required." The original NBN contract with ZTE for $330 million was signed by Arroyo last April 20 in Hainan, China. Since its signing last April, DOTC has not disclosed the details of the contact. The contract was signed in a bid to save the government some P3.4 billion yearly in telephone bills. Funding under the contact with ZTE would come from a 15-year loan from the Chinese state-owned bank with a five-year grace period. - GMANews.TV