Press Release
September 18, 2007

NOTHING STOPS PGMA FROM RESCINDING CONTRACT
"SAVINGS FROM ZTE DEAL ARE FICTITIOUS"

Senator Mar Roxas is urging President Gloria Macapagal Arroyo to rescind the broadband deal with Chinese firm ZTE Corp., noting that there are no legal hurdles or commitments preventing this.

"I think that there is nothing that compels the government from pushing through with what is clearly a controversial and anomalous contract. The President should just say, 'no, enough,'" he said.

"Once again, we confront a project that has all the elements found in this contract and so many others like them that were problematic or overpriced. When will we ever learn?" he added.

Roxas, chairman of the Senate trade committee, said that in answering the questions "what is our need" and "what is the correct solution for this need," further doubts are raised as to whether complete staff work was done by the government before inking the deal with ZTE Corp. for the NBN.

"Government's reasons are savings of P4 billion in communications costs per year, better interconnectivity among government agencies, and exclusivity," he said.

"But it seems that supposed savings from the deal are fictitious, the design is inappropriate for the country's needs, and the manner in which the project was undertaken is anomalous," he stressed.

On the contrary, Roxas said building the NBN to save on communications costs is tantamount to saying "let's build a new highway parallel to the NLEX or SLEX exclusive for government vehicles, so we will be able to save on transport costs."

"Running a broadband network is not a core competence of the government," he said.

Roxas lamented the non-attendance of government officials—who could answer questions as to the need for such broadband network—in the hearing. This betrays the lack of a financial plan, a feasibility study and other must-do "complete staff work" for any big-ticket project.

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