$130-M ‘Commission’

Nuns shield abducted star witness
MANILA Under the protection of nuns at De La Salle high school in Greenhills in San Juan, Rizal, the key witness in the aborted ZTE deal for a National Broadband Network who was earlier abducted by police from the NAIA after arriving from Hong Kong, revealed the details of how former Comelec chair Benjamin Abalaos wanted $130 million as commission for the bloated $329-million contract.

Rodolfo Lozada Jr., a key witness in the NBN controversy, made the revelation at a hastily called press briefing before dawn Feb. 7 at the De La Salle High School in Greenhills, San Juan. He repeated this claim when he later appeared before the Senate blue ribbon committee.

Lozada told of how former socioeconomic planning secretary Romulo Neri asked him to tell Abalos and the others involved to moderate the greed.

Lozada, in effect, corroborated the expose of businessman Joey de Venecia, son of Speaker Jose de Venecia, who originally fingered Abalos and the First Gentleman Mike Arroy, as among those involved in the deal.

In the press conference, Lozada said it took only a mere phone call by Abalos to First Gentleman Jose Miguel Arroyo for the government to junk its original build-operate-transfer plan for a national broadband network and approve a Chinese loan facility for the $329-million NBN deal with ZTE Corp.
Lozada, resigned president of the state-run Philippine Forest Corp., said it was Abalos who egged on Mr. Arroyo to get a loan package for the overpriced NBN project with ZTE Corp. of China.

In other developments:
- The government unleashed an all-out attack on Lozada to discredit his testimony in the Senate and church groups, including bishops massed forces in support of the witness.
- In the Feb. 11 Senate hearing, government witnesses denied that Lozada was kidnapped on arrival at the airport or asked to sign papers under duress.
- The Supreme Court asked the Philippine National Police to explain why Lozada was abducted upon his arrival from Hong Hong at the Ninoy Aquino International Airport.
- President Gloria Macapagal Arroyo ordered her department of justice to investigate all the personalities involved in the ZTE scandal. A newspaper said the probe does not include the First Gentleman.
- Senate President Manuel Villar said the Senate should also investigate the police abduction and its claim that Lozada had asked for their protection.
- Sources exposed a supposed plot to explode bombs in the city to draw away attention from the Lozada testimony.
- Police were ordered to block any attempt to stage demonstrations at the Edsa People Power shrine.

Lozada, who served as consultant to Neri for the NBN project, said he and Neri wanted the project done through BOT so that there would be no cost to the government. Neri was later yanked out of NEDA because of his opposition to the deal.

Lozada said his troubles started when he, following instructions from Neri and supposedly from the President, insisted that project be implemented through BOT and not through a loan package separate from the CyberEducation project.

He said a displeased Abalos promptly called the First Gentleman to inform him of his and Neris reluctance to secure a loan for the project. He said it was Abalos himself who claimed that he was talking to Mr. Arroyo. But Lozada said he himself didnt hear the voice on the other end.

But the following day, true enough a letter from the Chinese ambassador came. If you can check I think sometime in December, a letter addressed to Mike (Arroyo) came in from the Chinese ambassador saying that there is now money available for loan for the NBN project independent of the CyberEducation project,” Lozada said. Its because the loan for CyberEd has been agreed on already. So now, theres another loan.”

This project for me is just one transactional example of a dysfunctional government procurement, like a systemic dysfunction of how we procure projects,” an emotional Lozada said at the briefing.

There are others that have escaped scrutiny, but the system is the same, Lozada said.
He stressed that he did not deal directly with the First Gentleman and that he only met him at a dinner hosted by Abalos sometime towards the third week of December.

Im pretty sure of the timing, for a dinner in Makati Shangri-La. He (Abalos) asked me to invite Joey as well because FG will be there with us, Lozada said.

Actually the First Gentleman did not say much, except that Chairman Abalos told him that pare OK na kami nina Joey, okay na kami sa NEDA,” Lozada said. Joey was businessman Joey de Venecia III who first squealed on the alleged overpricing in the NBN project.

Ah ganun, so buti naman OK na OK na (I see. Good, good its ok), Lozada quoted the First Gentleman as saying.

Lozada said Abalos gave the impression that things were already settled even if they were not.
While he could not say exactly how much the project was overpriced, Lozada said chairman Abalos was asking us to protect $130 million out of the $262 million project cost.

Lozada said that when told of Abalos demand, Neri gave him a specific instruction: Jun, you moderate their greed. I was naive to accept that order. So I do not know what moderating greed means.”

He said that at that time, Abalos was already worried about losing his $130- million commission. But Neri said Lozada must have misinterpreted his instructions. I must have used colorful language. When I say that it means look for ways to reduce the project cost which is really part of our normal job at NEDA.

Lozada said it was late September or late October when he was first introduced to the project by Neri, who let him meet Abalos in Wack Wack Golf and Country Club in Mandaluyong City together with his usual companions Ruben Reyes, Leo San Miguel, and ZTE representatives Yu Yong and Fan Yan.
And we had lunch in Wack Wack, wherein we talked about the NBN-ZTE, and the good secretary asked me to help him out understand what this whole project is all about,” Lozada said.

If I remember right, the secretary told chairman Abalos to course his project proposal through the proper channels. NEDA received the first copy sometime in October, of the first version of the CICT (Commission on Information and Communications Technology) feasibility study,” Lozada said.

It was prepared by ZTE, and of course CICT. It was signed by the then secretary. All questions were referred back to Asec (Assistant Secretary Lorenzo) Formoso (of the Department of Transportation and Communications),” Lozada said.

Lozada said he was shocked to discover that the financial projection for the NBN project was based only on an article in the Sept. 20, 2006 issue of Abante Tonite tabloid.

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