Doesn't anybody in the Philippines know the meaning of a contract? Does anybody still abide by it? In a functioning government, the incoming government abides by contracts that were signed by the outgoing government. This gives the impression of stability and continuity and makes it appealing to investors to do business in the country and with the government itself. Apparently, the Philippine government believes contracts were made to be broken only to sign a new one only with their friends and relatives. Even private companies and people are not immune to this contract ignorance. Just look at the Willie Revillame case. Even the courts sided with Willie when he signed a new contract while his "exclusive" contract was still in force. What was the contract for? Why did the court not uphold the contract between Revillame and ABS and allow Willie to work at another company?
Noynoy government can’t be trusted — Belgian firmBy Charlie V. Manalo
All of President Aquino’s assurances to foreign and local investors he is trying to woo for his Public-Private Partnership projects, which are said to be composed of big ticket items, may have gone to naught, as he and his government have done a Gloria Arroyo, which is to cancel a clean contract.
With no categorical explanation and no formal notification on its decision to cancel the multibillion-peso Laguna Lake dredging project, a counsel for the project’s Belgian contractor yesterday accused the Aquino administration of being highly untrustworthy, calling the Noynoy administration a government that can never be trusted.
“A government that runs away from its contract is a government that cannot be trusted,” Abraham Espejo, legal counsel for Baggerwerken Decloedt en Zoon (BDC), charged during the weekly Kapihan sa Sulo yesterday, referring to the Aquino administration.
Espejo stressed that with the P18.7-billion project in perfect order as attested to by Justice Secretary Leila de Lima, the Aquino administration is legally bound by law to adhere to all its provisions, thus the need to execute the project.
However, in his meeting with BDC director and general manager, Dimitry Dutilleux last Friday, Finance Secretary Cesar Purisima confirmed that the project had been cancelled months ago, shortly after President Aquino marked his first 100 days in office.
Dutilleux said that while Purisima told him of the cancellation of the project, there was still no formal notification from the government.
“I only learned the project was being cancelled a week ago through the news. But Secretary Purisima told me it had already been cancelled months ago,” Dutilleux told media men covering the forum, adding that he had
engaged the Finance Secretary in an emotional debate on the issue during their meeting.
He however refused to divulge what had transpired during the meeting saying he does not want to issue any statement at this point that would affect the project.
“All we want is to be given the opportunity to present to this administration the feasibility of this project,” said Dutilleux.
But with rumors ongoing that the reason for the cancellation of the project were allegations it is tainted with graft, Belgian Ambassador Christian Meerschman, who was also present during the meeting said there was no mention of corruption or bribery during their talks with Purisima.
“All he discussed were technicalities,” said Meerschman.
“But what more can they ask for?” said Dutilleux. “We have contracted this project for P18.7 billion of which 12 percent is VAT which means it would go back to government coffers. Thirty seven percent of the project cost is grant and that means you will be getting P18.7 billion worth of project but would only cost you around P9 billion.”
BDC is also committed to reclaim portions of the Laguna Lake, particularly in San Pedro, Laguna and Taytay, Rizal using the dredge materials, rehabilitate mangrove areas and leave its state-of-the-art dredging equipment to the Laguna Lake Development Authority (LLDA) for the lake’s maintenance.
“We gave this government an offer it cannot refuse,” said Dutilleux adding that their competitors refused to participate in the lake’s dredging as they cannot guarantee fish pens that have mushroomed all over the 900 square-kilometer lake would not be removed.
“If we are to wait until all the fish pens in Laguna Lake are removed, dredging would never commence. But with our state-of-the-art equipment, we have assured this government that we could proceed with the dredging without dismantling a single fish pen,” he stressed.
The Laguna Lake rehabilitation project was initiated in compliance with Executive Order No. 815 issued by former President Gloria Arroyo on July 6, 2009.
After a series of meetings and consultations with concerned agencies and affected sectors, the final version of the supply contract was finally signed on April 26 this year.
The project involves the dredging of the Napindan Channel, the partial deepening of Laguna Lake from its present 2.5 meter average depth (down from an average of 6.5 meter depth a century ago), the development of nautical channel within the lake, the development of two large ecological areas alongside Laguna Lake and the construction of infrastructure for relocation areas of lakeside-based informal settlers.
The funding for the project was acquired through a loan approved by Fortis Bank, a subsidiary of the BNO-Paribas Group. The contractor, BDC, reputed to be the second largest dredging company in the world, was the same contractor which dredged the Pasig River, finishing the project one year ahead of schedule.
Questioned for lack of bidding, the project was temporarily suspended. Last June, Acting Justice Secretary Alberto Agra issued an opinion saying the loan agreement is wholly guaranteed by the Belgian government and considered an Official Development Assistance (ODA) in an executive agreement which automatically exempts it from public bidding.
In September this year, Justice chief De Lima upheld the statement of her predecessor declaring the contract to be valid.
At the House of Representatives, the Committee on Ecology, in a hearing last September, key officials of the Department of Environment and Natural Resources (DENR), Department of Finance (DoF) and Department of Justice (DoJ), all declared there is no reason for the project to be discontinued.
Expressing sympathy for the Belgian contractor, former Sen. Francisco “Kit” Tatad said that with the hullaballoo involving the project, the Filipinos would have a bigger problem than the Belgians.
“This is completely unacceptable. The proponent says they have a valid contract. And the DoJ says there is a valid contract. This is not the way a government should behave,” said Tatad. “The government should have notified the proponent why the project is being cancelled.
“While there is a constitutional provision on midnight appointments, there is no such thing in the Constitution regarding midnight contracts,” he added implying the government should honor its obligations to BDC.
“We need a government that should act responsibly.” Tatad added.
The former senator stressed that with the cancellation of the project, the Aquino government would now have to deal with its repercussion including possible strained relationships not only with the Belgian government but the whole European community as well.
“Your company may have some problems,” Tatad told Dutilleux, “but we Filipinos face a bigger problem.”
“This government needs all the help that it can get. It hasn’t yet discovered the ABCs of governance,” Tatad said.
Asked for their possible move, BDC however discounted the possibility of immediately resorting to international arbitration.
“We want to exhaust all possible means first for the implementation of this project,” said Dutilleux.
But with or without international arbitration, the government faces a fine of 5.5 million euros for cancelling the project.
If found guilty in the international arbitration, the fine could go as high as 20 to 30 percent of the total project cost.
This will be no different from the Piatco contract, which was aready a perfected contract and with the new airport terminal already 90 percent finished when the contract was rescinded and the terminal expropriated. German and Philippine relations remain strained to this day.
And to this day, neither the Arroyo government nor the Aquino government has shelled out money to Piatco and Fraport, the German partner in Piatco, for “just compensation” in exchange of the expropriated property.
Obnly P3 billion was given to Piatco by the Arroyo government as downpayment.”
Aquino had earlier bragged that the Philippine government had won the case against Piatco in the international arbitration arena, and praised one of the Philippine lawyers for having won the case for the Philippines, to the extent of appointing her to the Supreme Court as associate SC justice.
What was not stated, however was the fact that the arbitration panel ordered the Philippine government to pay Piatco just compensation.
To date, the Philippine government, while it has opened the Ninoy Aquino International Airport Terminal lll, it cannot exercise ownership, which is the reason the international airlines still cannot relocate their airport offices from NAIA Terminal l to NAIA Terminal lll.