Group: COA can’t cancel BOT contracts funded by private funds

The Commission on Audit. (File photo from the Philippine Daily Inquirer)

The Commission on Audit (COA) has no authority to cancel Build-Operate Transfer (BOT) contracts that is funded by private funds, a consumer group said in a statement.

The Action for Consumerism and Transparency in Nation Building (Action), through spokesperon Jake Silo, said COA was treading on dangerous ground in seeking to void a public-private partnership (PPP) of the Bureau of Immigration (BI) for the production of alien certificate of registration identity cards (ACR I-Cards).

“While COA is the guardian of public funds, it has no vested authority to cancel a BOT contract that is 100-percent funded by private funds,” Silo said. “Its call on the BI to take over the facilities, fixtures and equipment for the ACR I-Cards by unceremoniously voiding the contract with Datatrail Corp. sends a cowering chill to all investors.”

ACR I-Cards are issued to foreign nationals staying in the Philippines for more than 59 days. It is a microchip-based identification cards with biometric security features that are being produced by Datatrail Corp. under a build-operate-transfer (BOT) contract validated by the Department of Justice (DOJ), the PPP Center, and the National Economic and Development Authority (Neda).

“The BOT law entirely vests the authority to pass upon all aspects of a BOT contract, including legalities and compliance with approval processes upon the Neda ICC,” Silo added.

The ICC is the Investment Coordination Committeee.

“This particular COA decision is not self executory because a BOT Agreement, by law, automatically provides for an Arbitration provision,” Silo said. “The contract termination will proceed only after full compliance with the procedures set forth by both parties in the Arbitration provision is complied with. This COA decision will have to be enforced thru courts of law and the government will not only suffer huge financial losses, but legal defeat, embarrassment and irreparable loss of credibility in the business community.”

The government has paid billions of pesos in damages over unwarranted cancellation of contracts, and it is almost certain that the ACR I-Cards case will be the next drain on government coffers.

Five Neda resolutions and four DOJ opinions across three administrations have affirmed the validity of the ACR I-Cards contract and its subsequent extension to 2024.

But the COA recently ordered the contract voided because in its view the 10-year agreement should have lapsed in 2013 and the extension granted is grossly disadvantageous to the government. It also claimed that the contract extension had not been approved by Neda. /atm