[ Malaya.com.ph ] May 15, 2008
The World Bank has approved the release of a $232 million road loan it earlier withheld following allegations of bid-rigging.
Bert Hofman, country director of WB said the board of executive directors approved the loan on Tuesday after the government-adopted measures to prevent any recurrence of corruption.
"Beyond building roads, this project will support long-term measures to help the government increase efficiency and address corruption in the public sector," Hoffman, said.
Last November, the WB postponed the release of the loan that should have been used in building roads in Surigao and Negros Oriental and Occidental.
The World Bank project is the second phase of a program to improve the Philippines’ creaking road and bridge network. In the first phase, the World Bank rejected two contracts (Surigao and Negros) worth $33 million because of signs of collusion and excessive pricing.
The World Bank lent $150 million to the government for the first phase of the road project.
The Philippines has been battling deeply rooted graft and corruption that has put off foreign investors, but it has had limited success.
The second phase of the road-building program costs a total of $576 million, the World Bank said.
The rest of the financing will come from the Philippine government and from the Australian government aid agency, AusAid.
Under this phase, 450 km (280 miles) of arterial roads and bridges will be upgraded and repaired across the archipelago.
One of the measures adopted by the government for this phase is the use of an independent procurement evaluator from the private sector to ensure there will be no repeat of the bid rigging in the first phase.
The World Bank said it was considering blacklisting the contractors involved in the bid rigging, which meant they would not be allowed to participate in the second phase of the project.
Budget Secretary Rolando Andaya said other development financing agencies such as the Japan Bank for International Cooperation (JBIC) could adopt the new measures implemented by the World Bank and the Philippines.
Japan, the Philippines’ biggest source of official development aid, was considering a loan of nearly $200 million for a similar road network improvement project and the government hoped to finalize the loan within the year, Andaya said.
Based on information obtained from a senior government source, the construction firms involved in the questioned biddings were : China State Construction Engineering Corp., China Road & Bridge Corp., China Geo-engineering Corp., China Wu Yi Co. Ltd, and E.C. De Luna Construction Corp.
Among the safeguards the government put in place are: the use of an independent procurement evaluator to improve the transparency and integrity of procurement processes; and enhanced procurement controls to ensure the reliability of contract cost estimates and detects overpricing.
Internal controls were also strengthened at the Department of public works and Highways, the implementing agency, while an independent civil-society group called RoadWatch will be on hand to monitor how the funds will be used every step of the project.
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