“The lust of gold succeeds the rage of conquest; the lust of gold, unfeeling and remorseless! The last corruption of degenerate man.” —Samuel Johnson, Irene (Act I, Section 1)
THE overpriced Diosdado Macapagal Highway, also called the “road to perdition.” The controversial Northrail project. The NBN-ZTE and the cyber-education project (CEP). What are the bottom-line issues in all these government projects? Corruption and lack of transparency. And, as usual, the people who are going to pay for all these projects with their taxes, their hard-earned money, are the last to know.
Just the other day, the World Bank (WB) “deferred” the implementation of a multimillion-dollar loan to the Philippines supposedly for “phase two” of the National Roads Improvement and Management Program (NRIMP) due to supposed corruption, specifically collusion and overpricing.
“Signs of procurement problems in the first phase of the program were identified. Between 2003 and 2006, the World Bank rejected two large road contracts in three successive rounds of bidding because of strong signs of collusion and excessive pricing,” said the World Bank, explaining its decision.
Here we go again! It seems the Philippine government can’t learn from its mistakes. It’s another national embarrassment that wouldn’t help our image as a nation—whatever is left of it—abroad. Do we wonder why Transparency International now considers us as among the most corrupt countries of the world?
In fairness, the Philippine government is saying the World Bank is the one to blame for insisting on its own “flawed public-procurement system” that is not tailored to the Philippine context. “That would not have happened had the World Bank not insisted on choosing its own system,” said Rolando Andaya, the Philippine budget secretary.
The problem, Mr. Andaya explained, lies with the fact that the World Bank supposedly allows bids higher than the indicated amount as against the Philippine approach, which only takes in bids lower than the indicated amount. “Now they are blaming us for something that they themselves insisted on adopting,” he said.
Andaya probably has a point there, but the truth is that the supposed collusion and overpricing happened within our borders. And given our recent experience with the NBN-CEP deals with the Chinese— where the government, specifically the National Economic and Development Authority, gave the go-ahead to projects that didn’t go through a bidding process—we are inclined to give more weight to the view from the WB.
Indeed, the World Bank actually expressed concern that the project could be vulnerable to corruption. In a project document prepared for the NRIMP, the bank, on “lessons learned” regarding the project, said: “The nature and political economy of corruption in the Philippines cuts through sectors and levels of bureaucracy, and bypasses preemption and law enforcement sanctions. National procurement has, at times, been affected by collusion and bid-rigging, with high payoff margins until bid ceilings were imposed.”
The WB document adds: “This has also affected foreign-assisted projects, where a bid ceiling is usually not permitted by international financing institutions, but corrective measures to date require further strengthening to be effective.”
Among the corrective measures suggested are the following:
1. Independent procurement assessment and technical audit that strengthens transparency of the bidding process;
2. Enhanced processes for procurement, financial management, internal controls and audits of the road-management agencies; and
3. Inclusion of a new and innovative coalition of citizen and road-user groups called Road Watch in the project-management setup. Road Watch will monitor project implementation and procurement and issue periodic report cards on the performance of the road sector.
Apparently, all these proposed measures have yet to materialize. That’s probably among the reasons we have another scandal in our midst.
Certainly, we need to speed up the implementation of these reforms, including the idea of including in the governance-procurement board the presence of the Catholic Bishops’ Conference of the Philippines and the Makati Business Club. And if these measures could be put right down to the provincial and municipal levels, they would surely make a difference.
What’s happening right now is another reflection of the utter lack of transparency in the country’s public-procurement system. And this is because despite all our pretensions to democracy and social openness, we have yet to enact “sunshine laws” like the Freedom of Information Act (FOIA) that would allow citizens and media access to all government documents and reports.
New democracies that emerged since the fall of the Berlin Wall immediately enacted sunshine laws to address corruption in their societies. We failed to do the same after the fall of the Marcos dictatorship, despite several attempts. This time we should have all these sunshine laws to stop these continuing tales of corruption in high places that have pervaded every fiber of our society.
The reason we can’t bring legislators to enact a FOIA is that there seems to be no widespread clamor for it. If we could muster the forces of academe, media, law groups, chambers of commerce, religious organizations and civil-society organizations, legislators and policy- makers would be forced to listen. (Originally prepared as editorial for BusinessMirror Nov 22 2007)