Press Release
September 5, 2007

PIMENTEL FILES RESOLUTION ASKING SENATE TO INQUIRE INTO NAT'L BROADBAND CONTRACT

Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today formally called for a Senate inquiry into the circumstances leading to the signing of the National Broadband contract between the government and the China's ZTE Corporation in view of allegations that the deal was tainted by irregularities.

In Senate Resolution 127, Pimentel asked the Senate to direct the Blue Ribbon Committee and the Committee on Trade and Industry to undertake the probe in aid of legislation.

"There is a need for the people to know the real story of the players and the circumstances that led to the signing of the broadband contract," Pimentel said.

The agreement on the broadband project was entered into by the government on April 21, 2007 in Boao, China by Transportation and Communications Secretary Leandro Mendoza on behalf of the Philippine government and ZTE Vice President Yu Yong in the presence of President Gloria Macapagal-Arroyo.

The project will reportedly cost some $329 million, that will be borrowed by the government from a bank or other sources from China.

Pimentel asked why the government veered away from the original intention to implement the NBN project under the build-operate-transfer (BOT) law, that will not cost the people any amount as the expenses for the project would supposedly be borne solely by the project proponent.

But under the approved arrangement, the government will shoulder the $329 million cost of the project for which no public bidding was made.

A day or so after the signing of the project agreement in Boao, China, incredibly the original copy of the contract was reportedly lost or stolen in a hotel.

Pimentel cited reports that must be verified that Commission on Elections Chairman Benjamin Abalos of the Commission on Elections lobbied for the approval of the broadband deal before, during and after the last election period, making his intervention in the matter not only highly suspicious but blatantly irregular, if not unlawful.

Moreover, there were allegations that the contract is overpriced by at least $100 million to take care of the "boys" who facilitated the consummation. Also Chairman Abalos was reported to have gone back and forth to China to meet with ZTE executives at the expense of the latter.

"At the very least, the norms of transparency and accountability required by the Constitution and the laws of the land appear to have been trumped by the actuation of government officials involved in the transaction," Pimentel said.

After the hearings on the case, the Blue Ribbon Committee and Committee on Trade and Industry are expected to make recommendations to hale to the Courts of Law the persons responsible for any anomaly in connection with the NBN project and to plug the loopholes if any, in the BOT law and other pertinent legislations.

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