Ombudsman orders graft raps vs ex-BFAR execs in P2.1-B VMS bidding
Office of the Ombudsman. (File photo by NOY MORCOSO | INQUIRER.net)
MANILA, Philippines — The Office of the Ombudsman has ordered the filing of graft complaints against three former officials of the Bureau of Fisheries and Aquatic Resources (BFAR) accused of involvement in the P2.1 billion deal with a controversial foreign firm for the government’s vessel monitoring system (VMS).
In a 25-page resolution signed by Ombudsman Samuel Martires last April 11, a case for graft will be filed against former Agriculture undersecretary Eduardo Gongona, former BFAR national director Demosthenes Escoto, former Agriculture assistant secretary Hansel Didulo, and Simon Tucker and Richard Hurd of SRT Marine Systems Solutions, Ltd.
According to the resolution, the former BFAR officials continued to sign a contract with SRT-France for the supply of technology and equipment for the Integrated Marine Environment Monitoring System Project Phase 1 or the PHILO Project even though the French Embassy to the Philippines deemed the company ineligible.
The PHILO Project was initiated in 2015, with the French government offering a loan of 28,520,000 Euros, with the condition that the project’s products be sourced from French suppliers.
The first bidding did not push through due to an issue with the mode of procurement, while the second bidding in 2017 was initially successful after Philippine officials picked SRT-France, a subsidiary company of SRT-United Kingdom (SRT-UK).
The French embassy, however, deemed SRT-France disqualified as it was only established a month before the first bidding.
It was found to have no manufacturing or engineering facilities in France, which means the Philippine government would have bought technology and parts from a UK-based company.
Instead of removing SRT-France from the list of bidders, however, the Ombudsman said BFAR officials chose to stop the bidding process, cancel the French loan, and suggest that the government fund the full cost of the program to avoid interest payments—only to have a new bidding process in which SRT-France won.
To the Ombudsman, this is an act of giving unwarranted benefits to SRT-France.
“Escoto and Gongona, while in the exercise of their official functions as Chairman of the BAC, and as Head of the Procuring Entity, respectively, and in conspiracy with Tucker, clearly gave unwarranted benefit or advantage to SRT-France and SRT-UK,” the Ombudsman said.
“Although the award of the contract to SRT-France was canceled, the unwarranted benefit they gave to SRT-France to participate in the bid and to be post-qualified despite its ineligibility already consummates a violation of Section 3(e) of RA No. 3019 (Anti-Graft and Corrupt Practices Act).”
The Ombudsman also took notice of the fact that the French Embassy, when it disqualified SRT-France, did not forfeit the loan it was offering to the Philippine government.
“When the French Embassy ruled on the disqualification of SRT-France, it did not seek the cancellation of the French Loan. In fact, the French Embassy was still open to discussion and was apparently willing to proceed with the Loan Agreement. The closing statement of Laurent Estrade, Head of the Economic Department, French Embassy, in his Letter dated 28 May 2018 to Gongona, reads: ‘We are at your disposal to discuss this matter further, and look forward to receiving any forthcoming updates on the project,’” the Ombudsman said.
“However, instead of discussing the matter with the French Government, the BAC (Bids and Awards Committee) immediately resolved to cancel the award to SRT-France on 4 June 2018 […] In fact, it was not the French Government that canceled the French Loan. It was canceled upon the request of DA-BFAR, and this request was approved by the NEDA ICC-CC only on 16 August 2018,” it added.
The Ombudsman said that it shows evidence that from the very beginning, the BFAR officials wanted to give the contract to SRT-France, or their parent company, SRT-UK.
“These series of events are circumstantial evidence proving that the contract for the PHILO Project was, at the very first instance, meant by Escoto and Gongona to be awarded to SRT-UK. The sudden creation of SRT-France a month before the second bidding; the permission given to SRT-France to participate in the bidding despite knowledge that it will have to depend on SRT-UK’s technical, professional and financial capabilities,” the Ombudsman said.
“[…] all these paved the way for SRT-UK to participate in the bidding — a bidding for a project with an expanded scope and increased project cost,” it added.
The PHILO Project would have enhanced the government’s efforts to protect its marine resources and fight illegal fishing by implementing a VMS for large commercial vessels that are operating within the country’s exclusive economic zone.
Last April 18, it was reported that the Ombudsman dismissed Escoto from his post due to his alleged participation in the “anomalous scheme.”
This prompted Agriculture Secretary Francisco Tiu Laurel Jr. to tap Isidro Velayo Jr. as the officer in charge of BFAR to ensure no disruption in the operations and implementation of the bureau’s major projects.
