DOTC: Lacks diligence, inept?

DOTC officials always say they are just being careful every time they justify their inability to get even one big ticket project going. We all accept the need to be careful. Even I assumed that the slow pace of public bidding, not one PPP project under construction after four years, is because their due diligence is thorough.

Well… prepare to be disappointed. I was going through the transcript of the Senate hearing on the Mactan International Airport and I hate to have my worse fears confirmed… there seems little due diligence to justify the delays.

Sen. Serge Osmeña’s questioning showed that they have been extremely bureaucratic in their approach to project proposals. Worse, their manner of evaluating project proposals can be described as perfunctory. In other words, token. A college student working with the help of Google should do a better job.

Now I understand the problem with DOTC. Now I see why they have used up so much time with very little to show. They are indecisive even in the application of rules they themselves formulated, as in that conflict of interest rule. Despite the battalion of lawyers, they are uncertain on the legal issues.
Just so my readers can get a flavor of the hearing, I will reproduce here relevant excerpts from the transcript. I hope P-Noy reads the full transcript so he will know he has a real problem at DOTC that demands his immediate action.

The characters here are: Sen. Osmena (SO), Sen. Trillanes, Cosette Canilao (CC), (Executive director of PPP Center), DOTC Sec. Abaya, Usec Lotilla, Usec T. Limcaoco, Atty. Pasion also of DOTC.

 

Sen. Osmeña is trying to find out from Atty Pasion, the head of the prequalification committee what kind of background checking or due diligence was done on the Mactan bidders.

SO: At that time, your official participation was head of PBAC?
Pasion: Yes, Your Honor.
SO: When was the PBAC organized?
 Lotilla: This was organized December 2012, Your Honor.
SO: 2012. Okay. So Atty. Pasion, you submitted a written report to the PBAC?
Pasion: Yes, Your Honor.
SO: How many pages was it?
Pasion: Just two pages, Your Honor. We stated there that ---
SO: You did your analysis in all of two pages?
Pasion: Yes, Your Honor. Just only a report, Your Honor, that the following ----
SO: It took you two months to write two pages. That is what you are telling the Committee?
Pasion: No, Your Honor. It took us about a month to evaluate all of the documents that were submitted.
SO: Sure. But don’t you explain what you evaluated?
Pasion: It was only a summary, Your Honor, that the following bidders are qualified to submit their bids for the project, Your Honor.
SO: … You are going to accept a two-pager that says, “Everybody is qualified”?

-o-

Here Sen. Osmeña tried to find out if they dug deeper into the claims made by the bidders in their submitted documents… Apparently, they merely took the word of the bidders and did not check if the bidders had problems in past projects.

SO: Well, they will never --- do you expect every bidder to say, “Well, these are the skeletons I have in my closet?”
CC: And on top of that, sir, we also stated there ---
SO: No, no, no. Answer that question first. Do you expect every bidder to be honest?
CC: Well, sir, the bidders are international operators, all of them and ---
SO: So, you’ve given them a seal of good housekeeping.
CC: Not only that, sir, but also --- There is this organization, the Aviation Council, Inc,…
SO: I want to know who undertakes the homework to look for the --- you know, here in the Senate, the Senate and House has a joint commission called the Commission on Appointments. And all the appointees all the nominees... undergo a background investigation. We do not depend on what the appointee says about himself.... So who undertook that for the DOTC?
CC: It’s also sir, in our --- it should be the technical --- and we also based this on the submissions of all the bidders.
SO: So, you’re saying, no one did?
CC: Actually, sir, informally, we also did because of our connections to the Aviation Council, Inc. And also…
SO: What do you mean “informally”?
CC: Yeah. Personally, sir, I made a presentation to the Aviation Council Inc. I think in 2012. And when I was there, I spoke to the president and also to some of the members of the ---
SO: And you called that a professional background check?
This line of questioning went on and on until:
SO: In other words, you did not have a professional group undertaking a deep background check on the qualifications, financial and non financial, of the various bidders concerned?
CC: It’s based on the sworn statement submitted by the bidders, sir.
SO: Oh, God! I’ll show you all the sworn statements that are submitted to us here. Really? If you believe them, then you would think they’re all candidates for sainthood. So you know, this is a very unprofessional way for you guys to go about these things. And, you know, which is why we questioned process because we want to perfect the process. And you guys are being so secretive that we don’t know what your damned process is. 
 ... But what you are telling the committee now, and correct me if I’m wrong, you didn’t do your homework…

-o-

SO: How far did you go in investigating the background of the various bidders?
Pasion: Sir, only insofar as their bid submissions are concerned, Your Honor.
SO: All right. Let me rephrase. Did you Google any of the bidders?
Pasion: No, Your Honor.
SO: No. You know, that’s the first thing my 14-year old daughter would do...
Pasion: No, Your Honor.
SO: Okay, Did you find out anything negative about, say, GMR?
Pasion: Like I said, beyond their submissions, Your Honor, I did not. 
SO: So, no one knew about these? All of these negative news that are coming out about GMR, none of you knew about because you are saying it was not in the rules and so, Usec Lotilla will tell me, “Well hindi naman ni-report iyan. He gave us a one pager.” That’s what you are telling the Committee?
SO: All right. And Secretary Abaya, the Committee would not be amiss in coming to a conclusion that the system that you’ve set up is flawed.

-o-

SO: You know, Mr. Secretary, it took me only one night of Googling to find out negatives about GMR. It took me about four or five hours including the printing and nobody in the DOTC did that...

-o-

SO: Megawide is a listed company. Meaning?
CC: When they presented to the BAC, it is also easy for the BAC members to countercheck.
SO: Which of the BAC members checked the background of Megawide?
TLimcaoco: Mr. Senator, for Megawide, being a publicly listed company, we relied on their financial statements that are submitted to the SEC. So that’s the background.
SO: You rely on their financial statements. That’s it?
TL: Yes, for their financial capabilities.
SO: Undersecretary Limcaoco, do you know everybody doctors their financial statements. That is the reason why there are phrases in the financial world that --- such as window dressing, such as and so, if they submitted it to the SEC, do you think the SEC checks? … So you don’t countercheck? You don’t go deeper. All right...

-o-

Eventually, Sen. Trillanes got an admission from Sec. Abaya that nothing has happened with the big ticket PPP projects.

ST: As correctly pointed out by the Chairman, this administration is on its fourth year and which among these big ticket projects have actually moved forward in the construction phase as compared to how many were launched, Secretary?

Sec. Abaya: In the construction, Your Honor, amongst the PPP, none yet.
ST: From day one, sir, of this administration?

 Sec. Abaya: None yet, Your Honor, for DOTC since day one. We would have wished LRT1 would have been the first and down the pipe, would have been AFCS and Mactan-Cebu, Your Honor. Again, this is only PPP, Your Honor. We have other projects that we’re undertaking for ports and airports and LTO, Your Honor.

Usec Lotilla subsequently claimed they have finished many airport and port projects, a hundred projects a year daw and cited the Daraga International Airport.

Usec Limcaoco claimed the same thing to me some months ago and when I checked with Albay Gov. Joey Salceda, he told me nothing was going on with the airport construction.

I checked again with Gov. Salceda the claim now of Usec Lotilla. The Governor’s response: “mukhang mas mabilis na ng konti but no cement yet.”
And that folks, is the story of DOTC.

Boo Chanco’s e-mail address isbchanco@gmail.com. Follow him on Twitter @boochanco

DEMAND AND SUPPLY By Boo Chanco (The Philippine Star)