The Madriaga files on NBN/ZTE

Rai    Society     nbn-zte, politics

This is a post from ellentordesillas.com’s blog:

—–

The following document landed in my mailbox. It’s supposed to have been written by a certain Dante Madriaga. Read on for what it’s worth:

I am an electronic/electrical engineer by profession.I attended the University of the Philippines and Texas A&M University.I have been in the communications industry for over 30 years.

I was a part owner of a company in the LISP in Cabuyao, Laguna that exported microwave radio transmitters.I was involved in the original design of the ARESCOM proposal using a concept similar to what Joey De Venecia thought about .I have been involved in the preparation and design of the NBN ZTE proposal since the beginning.

I have been a technical consultant for the project involved not only in the design but as a liaison to NEDA, DOTC/TELOF/CICT. I was involved in all discussions regarding the project including the names of other people involved, margins and actual pricing details.

ZTE International signs an MOU with the government on March 14 on a National Broadband Network project.

The following is my account of the project from the start to the time when the negotiations were turned over to the finance group. With the exception of the China trips I was present in all the meetings. There may be some omissions and oversights some of it done on purpose

May 2006 -The project was brought to ZTE on May 5 by a person named Stephen Lai, who was originally with Arescom and is a personal friend of the Arescom president Cris Ching. ZTE approached Chairman Abalos whom they knew to help on the political side.

Chairman Abalos enlisted the help of Ruben Reyes a golfing buddy to come up with a team to expedite matters. Ruben Reyes contacted General Quirino de la Torre and Leo San Miguel. I was approached by Leo San Miguel whom I had known before to work on the project. I provided Leo inputs on the Arescom proposal which ZTE used as a basis to start their design.

June 2006 - Ruben Reyes, Leo San Miguel, Gen. de la Torre, Stephen Lai, Yu Yong, Fan Yang meet on June 16 at the Makati Shangri-La in a private environment to discuss the NBN project. They were later joined by Chairman Abalos who left first. We start the design work but are hindered by cost constrains. There is no possible way to achieve the $130M Arescom budget with the commissions that were needed. They decide to increase it to $190M and later added some more components to make it $262M.

Same group meet on June 18 with the addition of Secretary Mike Defensor and Abalos Chief Of Staff Paz and without Stephen Lai meet in Wack-Wack to discuss details on the commissions.

July 2006 -We make initial presentations to CICT and Telof at the CICT office. Chairman Sales was present together with then Telof Asec. Frank Perez the son of Sec Nani Perez, Commissioner Lorenzo Formoso, ZTE personnel and the DOTC/CICT technical staff.

Chairman Sales initial comment was that the NBN project was best left up to private but promised to review the proposal and make recommendations.We made similar presentations to the NEDA infrastructure group, present was the ZTE group including Fan Yang and the accounting personnel of ZTE. NEDA writes a letter to us citing objections to the initial design.

PGMA signs an MOU on July 12 designating Sec Favila to negotiate with ZTE on the government’s behalf. Group meets on July 25 in Wack-Wack to solve the problems.

August 2006 -Then DOTC Asec. Perez makes a presentation and objects to the cost and the design. I work with the NEDA group to smooth out their objections.
Asec Perez who openly discredits the project is promptly replaced by Comm. Formoso who vowed to help with the implementation.Asec Formoso is a better choice than Asec Perez because he is an engineer and a lawyer and can defend the project well.

Chairman Sales reviews the project but is still not convinced; thru back door channels he changes his tune at a later date.

Group on August 11 goes to China and demand an advance payment upon orders from the boss ostensibly to facilitate the approval and for PR. Chairman Abalos leaves first over the weekend. They get it after mentioning the name of the FG. Ruben Reyes is designated as the recipient.

Group comes back from China on August 15 and meets again with Chairman Abalos to tell of their success. US$ 1M was doled out , Ruben Reyes was designated as the recipient.

September 2006 -Group meets regularly at Wack-Wack every weekend at night to discuss ways to facilitate the approval of the project.

NEDA status is ok but all of a sudden meets a sudden resistance from Director General Neri.

Group meets at Wack-Wack on September 22 to address the problem.We meet Sec Mendoza at his office and make representations. Secretary does not hear the full presentation but endorses us to the then head of legal Atty Noel Cruz.

DOTC legal returns the endorsement of the NBN project to the CICT.
Design is changed again trying to fit the commitments. ZTE and group argue on the profit margins, they finally decide on September 28 that the increasing the project amount to $270M will give them a margin of $70M each.

October 2006 – The name Joey de Venecia suddenly comes into play and makes the group worried. He wants the same project but on a BOT scheme and is adamant about it, he had the idea long before Arescom and ZTE conceptualized it in fact the whole idea the Arescom proposal came from Joey

Leo San Miguel is tasked to fix the problem since he personally knows Joey. The negotiations do not progress because of Joey’s distrust for the group. Group meets at Wack-Wack on October 11 and decides to ask the FG for help on how to handle Joey.

Ruben Reyes, Chairman Abalos and General De La Torre fly to China on October 14 and discuss the problem with the ZTE officials about Joey. ZTE is alarmed but is reassured that everything will be taken care of with the intervention of the FG.

November 2006 -Group is notified on November 12 that the President does not want to borrow and instead wants a BOT scheme similar to the AHI proposal. Group decides to compete with Joey and brings an alternate solution by bringing out a competing BOT offer.

Joey is unfazed since he holds all the cards at NEDA with his father’s help and stonewalls the group’s effort. Group meets almost daily to discuss ways to resolve the issues. ZTE is furious at group for not controlling the situation.

Group decides that the only way that Secretary Neri would not object is to offer him a commission of US$ 4M at that time the exchange rate of 50-1. Chairman Abalos is designated to fix the problem.

December 2006 – Group submits a proposal to Chairman Sales changing strategy and hoping to revive the NBN proposal to a BOT similar to Joey’s proposal.

In a meeting in Wack-Wack in December 5, FG and Abalos try to convince Joey to just partner with them and quit his objection. In the meeting at Wack Wack FG threatens Joey by telling him to back off and stay out of the project.

ZTE tries to help out in the conflict and even designs the AHI network thereby exposing their pricing to Joey’s group.

Group goes to China on December 27 with Joey to fix the problem, they meet with ZTE officials at ZTE HQ but the negotiation fails. It was during these negotiations that Joey brought up the idea of ZTE partnering with Hwawei, another Chinese supplier. The suggestion is promptly dismissed by ZTE and negotiations break down. Group demand an advance and promptly got it from ZTE before the arrival of Joey De Venecia. Ruben Reyes is again designated as the recipient. US$5M was doled out.

January 2007 -Group abandons the BOT proposal and decides to meet Joey De Venecia’s AHI group head on with their own BOT proposal. Asec Formoso organizes a defense by creating a Technical Working Group (TWG) to evaluate the proposals of ZTE, AHI and Arescom.

It comes as no surprise that the TWG comes up with a report tilted in favor of ZTE because all of the members are either TELOF or DOTC personnel, they do not want the offer of AHI since it will be implemented by the private AHI group.

Group plots strategy and enlist Secretary Mendoza since Chairman Sales is a technocrat and Secretary Mendoza is a long time ally. Group decides to move Telof back to DOTC citing the reason that CICT is a commission and cannot implement a project of this magnitude. In the end Secretary Sales signs the endorsement of the project anyway.

February 2007 -TWG finishes the evaluation and hands it to the Technical Working Committee (TWC) who promptly endorses it to Secretary Mendoza.
ZTE is endorsed to NEDA by both Mendoza and Sales.

Joey is not impressed and files a complaint about the ZTE proposal to whoever would listen citing the disadvantages to the government. The project at NEDA is delayed and the much needed NEDA approval is stalled. Secretary Neri does not seem to be favoring the NBN and appears to be part of the problem because he likes the AHI proposal rather than the NBN which requires a government guarantee.

March 2007 -Help finally comes on March 8 in the person of Ricky Razon who helps them secure the approval of PGMA in order to meet the deadline for final NEDA approval by the executive.

Group meets on March 12 in Wack- Wack with Yu Yong and Fan Yang but could not agree on how to handle the compensation for Razon. They finally expand the proposed coverage to increase the amount to $329 thereby solving their problem.

Joey is furious when the NBN proposal is approved and threatens to expose all the dealings that stopped his much superior proposal. Group does not appear to be worried and thinks it is just sour griping. Upon approval by the NEDA group meets on March 28 in Wack Wack with ZTE and demand another cash advance which they got. Ruben Reyes is the designated recipient again.US$10M is again doled out.

April 2006 -Group meets again in Makati Shangri-La on April 4 with Yu Yong and Fan Yang of ZTE to discuss ways of getting upfront money to finance partly the elections and some personal needs. Ruben Reyes is again designated as the recipient.US$ 30M is again doled out.

Yu Yong agrees but on the condition that PGMA be present at the signing. PGMA promptly goes to China to witness the signing.
FG cannot participate since he is hospitalized and Abalos is busy with the elections. Ruben Reyes takes over all of the negotiations and transfer of funds.

Upon arrival from China on April 27, Secretary Mendoza and Secretary Favila visit the FG and inform him of the good news.

Source:  www.ellentordesillas.com

NBN-ZTE Scandal Continues…

Rai    Society     abalos, lozada, nbn-zte, Philippines, scandal, zte

To those who are not yet aware, the NBN-ZTE Scandal has a new ’secret’ witness: CEO of the Philippine Forest Corporation Rodolfo Noel I. Lozada, Jr. Lozada implicated that FG Jose Miguel Arroyo and Former COMELEC Chairman Benjamin Abalos in the said scandal.

Lozada left the country hours before January 30 Senate hearing he was supposed to attend. This prompted the senators to issue a warrant of arrest against him. As soon as he returned to the country, the Senate was not able to get him as he was taken away by suspected presidential guards. In a petition seeking his release filed before the Supreme Court, his wife Violeta said he was taken into police custody against his will. (from GMANews.tv)

Inquirer.net writes:

Former Commission on Elections chairman Benjamin Abalos Sr. denied that he threatened the life of Rodolfo Noel “Jun” Lozada Jr. and claimed that Lozada even went back to the Wack Wack Golf and Country Club in Mandaluyong City several times after the threat was allegedly made on January 18, 2007.

Abalos said Lozada, the Senate’s star witness on the controversial $329-million contract with ZTE Corp. for the national broadband network (NBN), went back to Wack Wack several times in February, 2007 after the death threat was allegedly made.

“Sinabi daw niya tinakot ko siya noong January 18 (He claims I threatened him on January 18). At that time, I was still president of Wack Wack,” Abalos said during a live television interview at the ABS-CBN studios in Quezon City. Lozada was also being interviewed live, although he was at La Salle Greenhills in Mandaluyong. The “face-off” happened via split-screen on television.

Lozada testified before the Senate Blue Ribbon Committee hearing that Abalos threatened his life by saying: “P.I, ka, huwag kang pumunta sa Wack Wack sa Mandaluyong kundi ipapapatay kita (You S.O.B., don’t show yourself at Wack Wack or I’ll have you killed).”

Stay tuned as I update you on this national issue that we need to be aware of.

NBN-ZTE Contract: What A Tiny Penguin Has To Say

Rai    Society     government, nbn-zte, Philippines, voip

The Philippine ICT has been stirred by the very controversial National Broadband Network-ZTE (NBN-ZTE) Contract. To those who are out of the loop, out of the country, or out of their minds, here is a quick note of why NBN-ZTE Contract is the “in” thing:

What is the ZTE-NBN Contract?

According to Computer Professionals’ Union,

The proposed National Broadband Network can potentially interconnect all government agencies and institutions thus improving communications and interactions between them. By creating a huge LAN or wide area network (WAN), the NBN aims to construct a national backbone in lieu of local providers to provide internet access to local government units and institutions and to streamline government services. The use of new value-added services can also be of great advantage to institutions in the network such as VOIP and video conferencing, which can reduce communications charges for the government.

In other words, NBN aims to make government offices into a huge network of interconnected computers so government transactions, services and communications will be greatly improved because of faster coordination rather than relying on old-skool technologies.

Why is NBN-ZTE contract very controversial?

Speculations are running wild on this contract but the question is: Who started this controversy?

The son of a prominent political figure, Jose de Venecia III (son of Jose de Venecia Jr) sparked the heat for he was allegedly bribed and threatened by COMELEC Chairman Benjamin Abalos, to drop the bid of de Venecia’s company, AHI, to the contract. To sum it up, the three contenders for the NBN deal were:

• US-based Arescom – $135 million
• Amsterdam Holdings Inc (AHI) – $240 million
• ZTE – $329.5 million

Even FG Mike Arroyo was pointed to be the “Mystery Man” involved in the said deal. Apparently, the contract was awarded to the Chinese firm, ZTE. Hence, the NBN-ZTE Contract Controversy.

Will Filipinos benefit from this project?

I do not know. This project has been kept away from public since the day of its conception so I do not think that this project was conceived because we need to “improve the Philippine ICT” or “make the government employees more efficient”. I say that my heart was broken to see that my fellow Filipinos take advantage of their kapwa Pilipino.

I am not surprised why foreign countries take advantage of the Filipinos in so many ways. It is because we teach them that we can take and be taken advantage of.

On the technical side, Filipinos are not yet ready for this kind of technology. I mean, how many Filipinos know how to use a computer or even a fax machine? I do not mean to belittle my fellowmen but if we cannot put landline phones and decent cellphone signals in rural parts of the countries, how will we handle much sophisticated technologies such as VOIP, LAN and WAN?

What can we do about this?

I think not too much. This is up to the government how to deal with this since it was “them” who messed it up in the first place. However, this got me thinking how much the Philippine government is so screwed. I know the Philippine government is already FUBAR, but could they be at least be discreet on doing their dirty deeds? Geez. (I hope I won’t get imprisoned for this).

Being a member of the ICT, I strongly believe that this project can be done by us Filipinos with what we have, and not to rely on foreign “assistance”. The problem however, is the lack of self-confidence that this can be done if only people will put their personal interests behind and put first the interest of the greater good. This may be too much for something that has always been the same for the last century (or millennium), but politicians should watch Evan Almighty, where God said that if we want to change the world, we only need one thing: ARK – Acts of Random Kindness.

If you want to know more about this topic on techie’s POV. go to http://www.cp-union.org/cms/. You can also petition to scrap the NBN-ZTE contract by going to the same website.