Other projects with ZTE sister company still intact — Favila

MANILA, Philippines - While the National Broadband Network (NBN) project has been canceled following allegations of massive corruption, the state’s other deals with the sister company of Zhong Xing Telecommunications Equipment Co. Ltd. (ZTE Corp.) will continue to be implemented. Trade Secretary Peter B. Favila disclosed on Tuesday during the Senate’s hearing on the NBN deal that the government inked five projects with ZTE International Investment Ltd. that included the $329.48-million NBN contract, which was supposed to link all state offices nationwide via the Internet. ZTE Corp. handles the overseas projects of its companies. These contracts include the establishment of an information technology school and training center; exploration, development and operation of mining areas in North Davao and Diwalwal in Compostela Valley in Mindanao, and the establishment of a special economic zone in Davao. Mr. Favila signed a memorandum of understanding (MoU) on March 14, 2006 in Guangdong, China with the Chinese firm for a $4-billion loan. The signing was witnessed by ZTE President Yu Yong, then Presidential chief-of-staff Michael T. Defensor and ZTE Chairman Hou Weigui. In the MoU, it indicated that "unless otherwise required by law, regulation or an order of a court or any appropriate government agency, a party hereto shall not reveal the contents of this agreement, or issue any press release or make any public announcement pertaining to the projects contemplated herein without prior written approval of all the parties to this agreement." Canceled Meanwhile, Mr. Favila submitted a document addressed to him from acting Foreign Affairs Secretary Franklin M. Ebdalin which indicated that only the NBN project was canceled. Mr. Favila said the cancellation was "formalized" in the meeting between Mrs. Arroyo and China’s President Hu Jintao in Shanghai, on Oct. 2, 2007. Senator Francis Joseph G. Escudero said the government should cancel all contracts entered into with ZTE. "The government should be protecting the interest of the state and not of the external party. Also during the hearing, a surprise witness named in previous testimonies instead surprised the senators and denied having direct knowledge in alleged advances to the so called "greedy group ++." "My job is purely [on the] technical [aspect]. I’ve never been involved in any deal except technical ones," said Leo G. San Miguel, former technical adviser of ZTE in the NBN deal, and whose name has been repeatedly implicated as part of the greedy group by Dante R. Madriaga. Mr. San Miguel, subpoenaed by the Senate last week, claimed he was "not aware [and] could not confirm" if there are advances or commissions requested in exchange for the approval of the project "because my role there was limited as technical adviser." Mr. San Miguel denied being part of the "greedy group" and claimed he "would not have accepted" being a consultant "if there were commissions involved." Mr. Madriaga has identified President Gloria Macapagal-Arroyo and her husband Jose Miguel T. Arroyo as beneficiaries of advances allegedly requested by the "Filipino group," namely Mr. San Miguel, Ruben Cesar Reyes, former poll chairman Benjamin S. Abalos, Sr. and retired general Quirino "Torch" D. dela Torre. "These are incredible information," said Mr. San Miguel, founder of Asia Cable Communications and former owner of Home Cable, Inc. He admitted talking to Mr. Abalos on several occasions but denied discussing the ZTE deal. Mr. San Miguel said his agreement with ZTE was "to refund all expenses" prior to the completion of the project and that he would be paid half percent of the total project cost if it pushed through. He said he had been reimbursed from between P3 million and P4 million. Senator Panfilo M. Lacson, who said he previously talked to Mr. San Miguel, said, "He told me that he was ready to give it all." But Mr. San Miguel said his meeting with Mr. Lacson on March 3 at the Makati Shangri-La Hotel was "accidental." For his part, Senator Manuel A. Roxas II, co-chairman of the joint panel investigating the contract and also head of the committee on trade and commerce, said there were parts of Mr. San Miguel’s testimony that are "difficult to believe," referring to his conversations with Mr. Abalos. Meanwhile, Associate Justice Presbitero J. Velasco, Jr. will not inhibit himself in the executive privilege issue the Supreme Court is discussing amid allegations he is a "golfing buddy" of one of the personalities in the case. NBN whistle-blower Rodolfo Noel I. Lozada, Jr. has tagged Mr. Velasco as the golfing partner of Commission on Education Chairman Romulo L. Neri. In a statement, Mr. Velasco said, "It is unfair to virtually question my objectivity and capacity to render a just and detached judgment in that NBN case on account of a single round of golf." — Bernard U. Allauigan and Ira P. Pedrasa, BusinessWorld