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WEARING
white elephant masks to depict the potential character
of the controversial national broadband network (NBN)
project, members of the Freedom from Debt Coalition (FDC)
staged a picket outside the Senate on Tuesday in time
for the blue-ribbon committee hearing on the project won
by China’s ZTE Corp. and stressed its debt burden on the
Filipino people.
Citing
pronouncements from government officials, the debt
watchdog calculated the maximum 3-percent interest for
the $329,481,290 project and its repayment in 20 years,
with the repayments starting five years after the
release of the loan.
FDC
president Ana Maria Nemenzo explained that with interest
payment alone, the Filipino people will be forced to
shell out about $10 million annually or about $198
million in 20 years for a project that is a white
elephant in the offing.
She
added that because of the automatic appropriations law
on debt servicing, taxpayers will be forced to pay about
$26 million a year, which includes the principal
amortization.
“At the
end of the repayment period, the total amount of this
reeking project will be about $527 million,” Nemenzo
said.
FDC
explained the reasons why the ZTE deal is a potential
white elephant:
§
There is
no existing financial analysis and plan for the project;
§
The
implementing agency is blind to any feasibility study
and has not initiated any detailed engineering study,
plan, specification and design for the said broadband
project. This entire aspect was tasked to ZTE alone;
§
It
suffers from a crisis of transparency. It is alleged
that there is a lack of competitive bidding which led to
the overpricing of the project. A similar project
proposal by Amsterdam Holdings Inc. at $240 million
costs a lot cheaper than ZTE’s offer; and
§
It also
suffers from a crisis of relevance. The question is: do
we really need it in the first place?
It was
reported that the government already owns two broadband
networks—the Philippine Administrative Network Project
supposedly to modernize the government’s news and
information network, and the Philippine Research,
Education and Government Information Network tasked to
interconnect academic institutions, government offices
and research and development centers in the country.
“Why do
we need a third one? Whatever happened to these two
networks? Have they become white elephants as well?”
Nemenzo asked.
“Considering the stink this transaction has already
emitted, the ZTE deal is already a curse and a potential
liability. Therefore, the ‘Contract for the Supply of
Equipment and Services for the National Broadband
Project’ signed in Boao, China, last April 20 must be
abrogated as soon as possible. Let us nip in the bud
this illegitimate and unnecessary debt while it’s still
early. To dilly-dally is not an option,” stressed
Nemenzo.
The FDC
group urged the Senate to protect the public from this
kind of anomalous and debt-creating agreements and to
prevent the administration from using the $400-million
loan facility granted by China to the Philippines, which
is apparently intended for the NBN deal.
“It is
not the President, Communications Secretary Leandro
Mendoza or Elections Chairman Benjamin Abalos who will
foot the bill for this scandalous deal, but the Filipino
people,” stressed Nemenzo.
During
the Asia-Pacific Economic Cooperation Summit in Sydney,
Australia, early this month, Trade Secretary Peter
Favila revealed that China will not cancel the loan
facility if the Philippine government junks the
broadband deal. He added that canceling the ZTE deal
would not affect RP-China relations.
“The
problem here is that the loan facility was negotiated
first before any concrete need was identified and
developed into a project, rather than the other way
around,” said Nemenzo.
The
group also urged the Senate “to rehabilitate Arroyo’s
administration from debt-addiction.”
“We
would like to remind the Senate, as well as the House of
Representatives, that the President’s total gross
borrowings and debt payments are already larger than
that of her predecessors combined. Among the post-Marcos
presidents, she holds the record of being the most
aggressive borrower and the most loyal client of lending
agencies for prioritizing debt service over the basic
needs of the Filipino people,” Nemenzo added. |
