Fire trucks overpriced
By Christine F. Herrera | Mar. 25, 2014 at 12:01am
Solons question PNoy, Mar on P1.3-b
Austrian deal
OPPOSITION lawmakers on Monday
accused President Benigno Aquino III and Local Governments Secretary Manuel
Roxas II of authorizing the importation of 76 overpriced fire trucks for P20.14
million each, rather than the P7 million that the administration publicized in
2012, or P6 million each for locally manufactured units.
Abakada Rep. Jonathan dela Cruz,
Bayan Muna Rep. Antonio Carlos Zarate and former Agham congressman Angelo
Palmones also warned the President and Roxas against importing 300 more
firetrucks from the same source, Rosenbauer of Austria.
Dela Cruz vowed to summon Roxas to a
Question Hour in Congress to shed light on charges that the Rosenbauer fire
trucks were priced even higher than those contracted by the previous Arroyo
administration.
After President Aquino came to power
in 2010, the Liberal Party led by Roxas questioned the loan concession that the
Arroyo administration had signed with Rosenbauer in 2008 or 2009, saying that
the contract price of each unit, at P16 million, was too high.
Local Governments Secretary Jesse
Robredo, also a Liberal, had branded the loan contract “onerous,” prompting the
Aquino administration to renegotiate the deal, government to government.
Robredo had publicly announced that
the renegotiation was successful and that the Philippine government had managed
to obtain a 40 percent grant from the Austrian government that supposedly
lowered the price of each truck from P16 million to only P7 million.
Shortly before he died in a plane
crash in August 2012, Robredo told the Manila Standard that the Philippine
government had already signed the supply contract and boasted that a “lot of
savings” had been generated because the units were priced at P7 million each.
But a 44-page supply contract signed
Dec. 14, 2011 by Robredo and Ralpf Schmid, vice president for international
sales at Rosenbauer, a copy of which was obtained by the Manila Standard,
showed the total contract price was EU20.49 million or about P1.33
billion—which worked out to P17.52 million per truck.
The signing of the P1.33-billion
loan agreement was held on the same day that President Aquino issued a “special
authority” to proceed, Palace documents show.
“All prices mentioned in this
contract (EU20.49 million or P1.33 billion) and payments to the benefit of the
supplier (Rosenbauer) shall be made in euro,” the supply contract said.
But import duties and taxes and
local transport were not part of the contract price, and these were to be paid
by the buyer, in this case, the Philippine government.
Dela Cruz said this clause raised
the grand total of the purchase to P1.53 billion or P20.14 million per truck.
The supply contract signing was
witnessed by Bureau of Fire Protection Chief Supt. Samuel Perez and Austrian
Embassy Commercial Attache Isabel Schmiedbauer.
“We demand that Congress summon
Roxas to a Question Hour to explain why, despite the overpricing, the DILG
plans to acquire 300 more fire trucks from the same source of the overpriced
units,” Dela Cruz said.
“The Aquino administration should
conduct a thorough due diligence check and postpone the purchase of 300 fire
trucks until the overpricing issue of the 76 units delivered had been
resolved,” Zarate added, noting that former Bayan Muna congressman Teddy Casino
had already exposed this during the 15th Congress.
“The DILG, the BFP and the
contractor should be made to explain first before proceeding with the purchase
of 300 additional fire trucks. If there explanations are not satisfactory, if
need be, these people should be penalized instead of proceeding with the total
purchase,” Zarate said.
Palmones was among the first to
question the government’s decision to prefer to import fire trucks in the 15th
Congress when the country has a local manufacturer that sold a “tropicalized
fire truck” invented by a Filipino entrepreneur at only P6 million to P9
million per unit.
“At the time of the contract
signing, Robredo announced that the present value per unit of fire truck was at
P7,077,494.34 or P537,889,57 million for the 76 units or 40.37 percent of the
total loan amount valued at P1,332,093,100. How come the formula they used made
the fire truck appreciate the value to P20.14 million? This is the first time I
hear that the value of a fire truck can appreciate instead of depreciate its
value over 17-and-a-half years,” Palmones said.
Palmones had filed a House
resolution to give priority to local manufacturers but House leaders at the
time, mostly members of the Liberal Party, archived the measure.
The Palace documents, particularly
those presented and submitted to the President, showed that the Aquino
government renegotiated the total contract price at an exchange rate of P65 to
a euro.
But when the loan contract was
signed on Jan. 12, 2012, or on the same day that the President gave it a go,
the prevailing euro to peso exchange rate was pegged at P56.50.
“The President was well aware of the
scandalous and anomalous overpricing and onerous loan agreement yet he still
gave the go to proceed with the procurement at the expense of the taxpayers as
the loan deal and the supply contracts were onerous and caused undue
disadvantage to the government,” Dela Cruz said.
In 2012, the highest rate was at
P57.68 to a euro on Feb. 24 and the average for the year was P54.28.
The peso weakened to P65 to a euro
during the time of the Arroyo administration in 2009 then reached a maximum of
P70.89 on Oct. 22, 2009.
In 2011, the highest per euro was at
P63.82 in May and the average for the year was at P60.28.
In 2013, the highest was P61.34 on
Dec. 30 and the average was P56.38.
“Is it possible that the Palace men
may have made a mistake like a typographical error so instead of P56, it became
P65 to a euro?” Dela Cruz asked.
“Last time we checked, the euro-peso
exchange rate never reached P65 during the Aquino government since 2010 up
until now. So where did President Aquino and the DILG get the exchange rate of P65?
Because that mistake had cost the taxpayers several millions,” said Dela Cruz,
a member of the independent minority bloc in the House, said.
The loan agreement became effective
on April 16, 2012 when the prevailing exchange rate was at P56.16 to a euro,
Palace documents showed.
The first four shipments were made
from October 2012 to March 2013 and arrived in the country starting January
2013 up to May 2013 or before and during the election campaign period with 50
units worth P1 billion distributed to various provinces and fire stations all
over the country, Palace documents showed.
The last two shipments, involving 26
units worth P523.64 million, were made starting June 2013 and ended in November
2013, with all six deliveries received and distributed nationwide by Roxas.
Dela Cruz said he could not help but
notice that the purchase and distribution nationwide of 76 imported units had
been made before, during and after the 2013 midterm senatorial elections under
Roxas’ leadership while the next planned 300 units would be made at the onset
of the 2016 presidential elections, when Roxas is expected to be the Liberal
Party standard bearer.
After President Aquino gave the
green light by issuing a special authority to proceed with the signing of the
loan agreement, the country’s economic team all endorsed the deal. The Monetary
Board approved the project on Feb. 16, 2012 that was affirmed by the Justice
Department on March 1, 2012.
The Finance Department, led by
Secretary Ceasar Purisima, was authorized to act as the “borrower” on behalf of
the Philippine government and the Department of Budget and Management, headed
by Secretary Florencio Abad, who was the President’s campaign manager in the
2010 presidential polls, approved the project’s Forward Obligation Authority.
Purisima and Abad were members of
the LP and part of the Balay Group headed by Roxas against another faction in
the Palace, the Samar Group, led by Executive Secretary Paquito Ochoa Jr.
Taxpayers will be paying the loan
for 17.5 years, including the 3.5-year grace period at an interest rate of 1
percent per annum, but with a grant of supposedly 40 percent as a concession
from the Austrian government.
The payment period for the principal
payments comes in 28 equal semi-annual payments at P47.57 million while
interest charges range from a low of P999,069 to a high of P66.66 million.
The Philippine government paid a
total of P185.46 million in taxes and duties and P13.32 million in “project
administration.” A total of P198.78 million was thus added to the total loan
amount of P1.33 billion, bringing the grand total to P1.53 billion.
House to ask Roxas: Justify fire truck deal
By Christine F. Herrera | Mar. 27, 2014 at 12:01am
THE House will compel Interior
Secretary Manuel Roxas to explain the “P200-million hidden charges” in the
overpriced and anomalous purchase of 76 imported fire trucks priced at P21
million each, a lawmaker said Wednesday.
Abakada Rep. Jonathan dela Cruz, who
filed House Resolution 990 that seeks to probe the “onerous” concessional loan
deal with Austria, identified the hidden charges as project management costing
taxpayers some P56.24 million, project administration amounting to P13.32
million, training and manuals worth P24.67 million, engineering and
specification design costing P16.25 million, other accessories costing P24.7
million, and the undelivered spare parts amounting to P61.98 million or a total
of P197.18 million.
“President Aquino will be stepping
down in June 2016, yet the taxpayers will continue to bear the brunt of paying
for these overpriced fire trucks for 17.5 years or even after he is long gone,”
Dela Cruz said.
“Roxas owes it to the Filipino
people to explain these overpricing and hidden-charges issues.”
Former Agham Rep. Angelo Palmones,
the most vocal critic of the loan deal with Rosenbauer-Austria, demanded that
Roxas account for the project’s status.
“We want to know what is this
project management worth P56.24 million?” Palmones said.
“What is being managed here when the
Philippines supposedly just bought the fire trucks that were also delivered?
What is this project administration cost pegged at P13.32 million?”
The Manila Standard had tried to
reach Roxas for comment since Sunday, to no avail. The Palace said Roxas would
soon explain the P1.33-billion concession loan from Austria in a
government-to-government contract.
The Palace spokesmen could not even
explain why the exchange rate used in acquiring the P1.33-billion
concession loan was P65 to a euro.
The Palace documents, particularly
those presented and submitted to the President, showed that the Aquino
administration renegotiated the total contract price at an exchange rate of P65
to a euro.
But when the loan agreement was
signed on Jan. 12, 2012, or on the same day that the President gave “special
authority” to proceed with the signing, the prevailing exchange rate was P56.50
to one euro.
The price of the Rosenbauer fire
trucks ballooned to P1.53 billion after the government shouldered taxes and
duties costing P185.45 million and project administration at P13.32 million.
Palmones, president of the Agham
party-list group, questioned the payment of engineering and specification
design worth P16.25 million.
“The Rosenbauer fire trucks arrived
without changes,” Palmones said.
“They were not even turned into
tropicalized fire trucks that could fit in narrow alleys where most fires
occur, particularly in congested Metro Manila.”
Palmones said the “trainings” that
cost the taxpayers some P24.67 million only involved the training of the
drivers of the fire trucks—not the entire fire-fighting team that could have
learned how to operate the fire trucks.
“So the taxpayers spent P324,717 to
train a driver,” Palmones said.
“Let’s cut that into half so we
include the relievers, and that would still come to a hefty P162,358 per
person.”
As to the P61.98 million worth of
spare parts, Palmones said those that arrived with the units were the most
basic ones, including screws that had no use once a fire truck sustained a
major as what happened to a fire truck assigned to Las Piñas.
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