|
The bloated NBN (national broadband network) and the CEP
(cyber-education projects) are parables whose moral
cannot be reiterated enough. The only backbone the
government needs today is a moral one; not fiber-optic
but fibre politique. —Raul Fabella and Emmanuel de Dios,
economics professors from the UP School of Economics
IF the
President still thinks of her legacy in the last three
years of her administration, she had better heed the
call of her colleagues from the University of the
Philippines’
School of Economics.
The
professors are advising her, albeit implicitly, to stop
the multibillion-peso national broadband network (NBN)
and the so-called cyber-education projects, for they
cannot be justified on sheer economic logic. It’s a
complete waste of people’s money.
We agree
with the professors’ call, especially in the case of the
NBN. It was apparently negotiated in utmost secrecy with
the Chinese government; and, with the subsequent “loss”
of the signed contracts in a hotel room in China, the
hush-hush deal seems to have the makings of another scam
that could push this country into another cycle of
economically destructive political spasms.
Take the
case of NBN. Drumbeaters for the NBN from the Department
of Transportation and Communications say the government
is going to save P27 billion over the 15-year span of
the project and reduce telephone expense by 8 percent.
What
they are not telling us is that the government is going
to spend P31 billion in operations and maintenance for
the network within the same period—a huge amount of
money that will be collected straight from taxpayers.
That’s a conservative figure, given that taxpayers are
also going to pay for the interest and principal, plus
the possible extra spending on delays and cost overruns.
This extra cost is expected given the consistently bad
record of the government in implementing infrastructure
projects.
And for
what? For that huge amount of money that the State will
squeeze off taxpayers, we are going to have a network
that is destined to be another lemon.
Why? For
two major reasons.
First,
it’s in the nature of government, particularly the
Philippine government. The NBN is going to be run by
bureaucrats who have no stake in the system but just
receive their monthly salaries; no discipline that could
only be ensured by the need to make the business
profitable, and is therefore likely to be managed
inefficiently.
Remember
the multibillion Telepono sa Barangay Program? We no
longer hear from it, but we know taxpayers paid P10
billion for it without alleviating the rural areas’ need
for communications access. And how could the government
make a difference this time?
Second,
it’s in the nature of technology. As explained by the
two economists, technological change in the information
and communications technology (ICT) sector is quick,
driven by competitive market pressures.
The
anecdote is that ICT technologies are obsolete even
before contractors have finished setting up the cables.
Private companies, therefore, keep on updating their ICT
capability as a way to ensure competitiveness.
But
there is no similar imperative among bureaucrats, whose
primary motive is getting their monthly salaries.
That
implies that the NBN could be nothing but some clunky
museum relic by the time the government is done paying
it with people’s blood money. And even before the
government has written the last check for the Chinese
after 20 years, government agencies may have completely
abandoned the network for its sheer inefficiency and
obsolescence.
We are
talking here about the possibility that we are going to
continuously pay people’s hard-earned money for a system
that’s doomed to be inutile in just a few years of
operation.
With
such a huge cost and questionable, nay, probably even
negative, social benefit, one can’t help but ask whose
interest the government is trying to satisfy with its
not-oh-so secret pursuit of the NBN.
If its
social benefit is in doubt, one could be tempted to
think some private motive is the primary consideration.
It’s so tempting to think that way because the
government seems to be moving heaven and earth to keep
the issue hidden from public scrutiny.
We all
know the project started with an unsolicited proposal
from Amsterdam Holdings Inc. (AHI) for a
build-operate-transfer (BOT) project amounting
reportedly to about $260 million, supposedly at no cost
to the government.
President Arroyo supposedly favored this approach since
the government is penniless. Not to be outdone,
Americans came up with their offer from Arescom for a
lesser amount, reportedly about $135 million, to be
financed through overseas development assistance.
Then
suddenly, the Chinese-owned ZTE came into the picture,
with an offer equivalent to that of AHI, plus supposedly
a “superior” technology.
Suddenly, the government forgot all about Arescom and
AHI, and came for ZTE. Come signing time, however, the
total amount for the project rose to US$329 million,
payable in 20 years to the China Export-Import Bank.
Hence, from a BOT deal, it has become a supply contract
with ZTE.
To top
it all, the Chinese bank also offered $500-million more
for an e-education project, on condition that this money
is going to be spent on Chinese equipment. And of
course, all the transactions are supposedly covered not
by Philippine laws, but by Chinese laws.
After
the signing ceremony, no less witnessed by the
President, the signed documents were supposedly “stolen”
in the hotel, a convenient excuse for bureaucrats to
hide details of the contract. Those bureaucrats may have
committed our souls to Mephistopheles, and we wouldn’t
know it because someone “stole” the document! Of course,
the government could have easily asked the Chinese to
fax us their copy for distribution to the media and
whoever is interested, in the interest of transparency,
while reconstructing the Philippine copy—but it seems
the government is not willing to do that.
Or maybe
the Chinese have lost their copies of the contract too?
Strange world this is.
Click
here to read the paper Profs. Fabella and de Dios |
