JUNKING OF BOT SCHEME IN BROADBAND NETWORK PROJECT STILL UNANSWERED BY DOTC

Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today asked Malacañang and the Department of Transportation and Communications (DOTC) why they deviated from the administration policy to undertake the National Broadband Network (NBN) project through the Build-Operate-Transfer (BOT) scheme to spare the government from spending taxpayers' money for it.

Pimentel said that while the Department of Justice Opinion No. 46, dated July 26, 2007, upheld the government's NBN contract with China's ZTE Corporation as "valid," it did not answer the fundamental question of why the BOT scheme was disregarded in favor of an agreement whereby such project will be funded by a $329 million loan from China's Export-Import Bank to be contracted and guaranteed by the government.

In fact, he said the DOJ opinion tends to evade this specific issue by just stating that "the BOT law is not applicable as the NBN project is not a BOT project."

Pimentel said the NBN project, now being pursued by the DOTC, is not governed by the BOT law precisely because the authorities concerned opted to junk the policy, laid down by President Gloria Macapagal-Arroyo, that this project should follow the BOT concept to save the cash-strapped government of expenses.

He cited the President's statements on the NBN project during a meeting of the National Economic Development Authority (NEDA) on the Cyber Corridor on Nov. 21, 2006 in which she enunciated the necessity for a privately-funded broadband network.

In her remarks directed at then NEDA director general Romulo Neri and then Commission on Information and Communications Technology Chairman Ramon Sales, the President emphasized that "you have to specify that the government broadband is BOT, not government would gonna spend for it."

The President further said in that NEDA meeting that the only way she, as NEDA chairman, would approve the NBN deal, is if it would make the government's telecommunications expenses "cheaper."

"Clearly, the policy spelled out by the President was for the adoption of the BOT scheme -- private funding and no government subsidy for the national broadband network project. Now, the big question is why have the decision-makers and implementors of the NBN project completely veered away from that policy?" Pimentel said.

He said the government's turnaround on this policy becomes even harder to justify given the fact that there were other bidders offering to undertake the NBN project without financial burden on the part of the government through the BOT.