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  • Senate set to probe purchase
    of Customs x-ray machines
     
    By Butch Fernandez
    Reporter
     

    THE controversial acquisition of x-ray machines by the Bureau of Customs (BOC) is up for scrutiny at the Senate blue-ribbon committee when it conducts a separate inquiry into the Northrail and Southrail projects, Sen. Francis Escudero said Thursday.

    He noted that the $150-million deal for the x-ray machines purchased by customs was part of a “side-agreement” tucked into the $1.109-billion government-to-government loan package arranged with China.

    Sen. Juan Ponce Enrile earlier elicited an admission from BOC chief Napoleon Morales that the Chinese-supplied x-ray units for “nonintrusive container inspection” of container vans coming into Philippine ports cost at least $2.5 million each.

    Enrile had confronted Morales about reports that businessman Francis Chua, former special envoy to China, facilitated the x-ray deal, but the customs chief said he could not confirm this.

    Enrile said the senators also want to verify reports that some of these x-ray units were “not working well” and that many were installed in areas that could not be justified. He cited reports that even after these giant machines have been installed in key ports in Manila and other major entry points of goods coming into the country, the bureau “has not been able to control smuggling.”

    Interviewed at length at dwIZ’s radio talk show Karambola Thursday morning, Morales said the machines were purchased under a “government-to-government” transaction, and the acquisition had been on the government’s plans since 1999, or long before he assumed office as customs chief. Deliberations were completed at the National Economic and Development Authority (Neda) Board in 2005, where it was agreed that obtaining such units was indispensable to the customs modernization that would convince foreign investors that Philippine operations were on world-class level, and that authorities in Manila can meet as well stringent demands to monitor security of shipments to curb global terrorism.

    “We are a member of the World Customs Organization, where we exchange notes on capacity-building, and I’ll tell you that we have the same machines as most countries that modernized their customs—Indonesia, Malaysia, New Zealand, Belgium, the Scandinavian countries,” Morales told the dwIZ hosts.

    He surmised that the gap between the $2.5-million per-unit price and the reported $1.9-million bill of other countries owed to the different specifications, specifically, “penetrating power.”

    To further justify the utility of the machines, Morales said the BOC’s biggest drugs haul in years, the seizure of P700-million precursor chemicals for making shabu, was made possible by the use of the x-rays.

    Even the past practice of “squeezing in firearms” into certain corners of shipments can be detected by the machines.

    Smuggling is quickly detected and dealt with, he explained, because with these units, the BOC no longer has to wait for the owner or his representative to show up, like before, “because with this one, we can establish that there are smuggled items without opening the container or breaking its seal.”

    Fears that selective smuggling could still be tolerated by certain BOC staff were also ruled out, because, explained Morales, “the records include the hard copy of the images taken,” and these cannot be selectively shut off or on, as some critics alleged. All the records are there.”

    Finally, Morales claimed that the use of the machines was a strong factor in the agency’s increasing its collections from P196 billion in 2005 to P198.2 billion in 2006. “Misdeclaration was reckoned with.”

    Senators had voiced concern over the BOC’s x-ray deal amid a raging controversy over the allegedly overpriced $330-million national broadband network deal with Zhong Xing Telecommunications Equipment Co. Ltd. of China that President Arroyo aborted amid a massive outcry.

    Escudero had moved to convene the congressional oversight committee for overseas development assistance (ODA) to check wanton approval of similar loan agreements that the senator said went around constitutional provisions that public funds “can only leave the Treasury pursuant to an appropriation made by Congress.”

    The x-ray scanning machines bought by the BOC from China were mentioned earlier by Enrile when finance and BOC officials appeared at a budget hearing in the Senate.

    On Wednesday, Sen. Jamby Madrigal raised the matter anew and pointed to one Franchis Chua, a former president of the Filipino-Chinese Chambers of Commerce, as having brokered it.

    In an interview with another paper, Chua explained that as special envoy, it was his task to encourage Chinese investors to come into the Philippines, and related action on this matter was his regular mandate.

    The purchase of the machines is part of the administration’s so-called nonintrusive container inspection system (NCIS) involving the installation of mobile or truck-mounted x-ray machines to scan container vans in different ports of the country. The NCIS project was implemented based on Executive Order 592 signed by President Arroyo on December 15, 2006.

    In her resolution, Madrigal said the government through the DFA and the BOC signed a concessional loan agreement with China in May 2006 and on January 15, 2007 to finance phase 1 and 2 of the NCIS. The loan for phase 1 is for $50 million for 10 units of the x-ray machines and for phase 2 $100 million for 20 additional units.

    Sources from the Chinese business community said Chua was the same businessman named in the importation of defective dump trucks for the National Irrigation Administration during the Marcos regime. He was also, according to sources, involved in the importation of 200 China buses for the DOTC in 1988-89. The buses were farmed out by the DOTC to Metro Manila bus operators through the Metro Manila Transit Corp. The bus operators who got the buses under an installment program defaulted in their payments. The buses which were repossessed by the MMTC were consigned to the junkyard.

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