Panel to handle China projects

BY ALEXIS DOUGLAS B. ROMERO, Reporter/BusinessWorld With senior government officials, a political ally ang her husband having been linked to a controversial China-funded telecommunications deal, President Gloria Macapagal-Arroyo Tuesday announced the creation of a special body to review projects funded by development assistance from Beijing. Malacañang said the move stressed the government’s commitment to transparency, but Palace officials also admitted it was in reaction to charges of anomalies in the $330-million National Broadband Network (NBN) project, awarded to Chinese firm ZTE Corp. and to be funded by official development assistance (ODA). The controversy has led to the shelving of four arrangements with China: the NBN deal itself, the proposed $450-million Cyber-Education Project, and two billion-dollar land lease agreements with two Chinese firms. Speaking at a Government Procurement Policy Board meeting in Malacañang, Mrs. Arroyo reiterated that she had suspended the broadband and cyber-education project in response to political criticism. But she said this should not prevent the government from pursuing agreements that comply with the law. "Even as we defer the said China projects, this should not be construed as a precedent for every disgruntled project proponent and his backers to undermine undertakings that comply with the law and benefit the nation. All branches of government must ensure that vested interests do not exploit our democracy to block our development," she said. Jose de Venecia III, a son of Arroyo ally House Speaker Jose C. de Venecia, Jr., has claimed that election commissioner Benjamin S. Abalos, Sr. offered him $10 million to drop his bid for the NBN project. Mr. de Venecia has also testified that First Gentleman Jose Miguel Arroyo ordered him to back off. The Senate is currently investigating the deal and the Palace, after initially resisting, has allowed Cabinet officials linked to the project to testify. Former Socioeconomic Planning Chief Romulo L. Neri, who allegedly was also offered a bribe, is scheduled to speak today. In Tuesday’s meeting, Mrs. Arroyo said "I am creating a special panel to oversee projects under the China official development assistance program." The group, called the China Projects Oversight Panel, will be headed by Trade Secretary Peter B. Favila who will serve as overall coordinator. Other members are Budget Secretary Rolando G. Andaya, Jr., Presidential Management Staff Director-General Cerge M. Remonde, a church leader and a representative of the Union of Local Authorities of the Philippines. Mrs. Arroyo said the Philippines must look at the economic growth in China as a "significant opportunity" to boost its trade and to come up with infrastructure projects. "Our overall relations with China have become more confident, mature, and comprehensive, punctuated with substantial and important projects aimed at deepening exchanges in a number of areas, including trade and official development assistance," she said. "China is currently our third largest trading partner with whom we have had a substantial trade surplus since 2002. Our framework agreement on expanding and deepening bilateral economic and trade cooperation is expected to further enhance bilateral merchandise trade with China." In a chance interview, Mr. Remonde said "The purpose [of the body] is to ensure that all the requirements of transparency and efficiency will be followed. [We are] learning from the ZTE [controversy]," he said. "This is really part of reiterating a long-held policy of the President and the government of promoting transparency especially in infrastructure projects." Mr. Remonde said special focus was given to Chinese-funded projects since these had stirred a lot of controversy. "Aside from that, there are a lot of major projects to be funded by China. Among these are the Laiban dam which is meant to enhance the water supply in Metro Manila, some irrigation projects and the agriculture projects that [Agriculture Secretary Arthur C.] Yap voluntarily withdrew," he said. Mr. Yap told the Senate on Monday that the Agriculture department had shelved two lease contracts being negotiated with Chinese companies as they needed to be fine-tuned further. The deals involve Chinese firms Jilin Fuhua, which plans to invest $3.83 billion for the production of corn, rice and sorghum in one million hectares of land, and Beidahuang, which was supposed to develop 200,000 hectares for rice, corn and other crops in Luzon. Mrs. Arroyo is scheduled to fly to China next week to seek roughly P8.4 billion in ODA to fund various projects including the Agno river irrigation program, Balingtingon river irrigation in Nueva Ecija, and the repair of Navotas fish port, among others. Mr. Remonde said he was confident these projects would not be affected by the ongoing controversy. China, the National Economic and Development Authority said in July, accounted for $460 million worth of ODA in 2006, about 5% of the total assistance secured that year.