I did not necessarily have 300 pesos to spare, but I found those pesos somehow, and proceeded to buy the thing along with other family stuff. And then I read this little book, totalling just 118 pages (including references) but mysteriously starting with page 9, in about 2 days.
What it contains is a detailed and, from a layman’s point of view, an excellent report of the state of major infrastructure projects of which a significant portion was built or implemented or worked on during the term of President Gloria Arroyo. These projects are:
1. North Luzon Railway
2. NAIA Terminal 3
3. Metro Rail Transit 3
4. Subic-Clark-Tarlac Expressway
5. Mt. Diwalwal
There are only five, you ask? The other “infrastructure projects” are the Quedancor, which was not in the business of infrastructure and was not a project, and defence procurement, which is not part of infrastructure and is not strictly a project. But apart from the fact that they are not really “infrastructure projects”, the detailed reportage is a tribute to the hard work of Newsbreak journalists, and the natural inquisitiveness and curiosity (or tendency to gossip) of the Filipino people.
The detailed work is supposed to be enabled and supplemented by the “independence” of Newsbreak journalists. Here is the Newsbreak website on the proclamation:
Newsbreak was born in a time of change—the first issue of what would become a fortnightly magazine came out on January 24, 2001, shortly after Edsa 2, when the Philippines was steeped in stories on people power.
Founded by senior journalists, who believe in honest, independent, and spunky reportage, we have since become a must-read for everyone who needs a better understanding of Philippine events. We have been providing readers in-depth stories, investigative reports, incisive analyses, as well as insider stuff that give a ringside view of the workings of people, politics, and power.
Thus spake Newsbreak. Unfortunately, the words “honest, independent and spunky” do not include “unbiased” and “objective”, two words that would not come to mind upon reading the book. Because other than detailed reportage, nothing in the stories, as told by Newsbreak, indicates that the “cost” and “mess” can be laid at the foot of President Arroyo. Let us count the ways:
1. North Luzon Railway
Newsbreak’s beef is that North Luzon Railway is behind schedule and over budget, and the book has traced the cause of the budget buster to a reduction in the commitment of China National Machinery and Engineering Corp. “[S]ome $500 million worth of costs in terms of locomotives, train cards, stations and other items will no longer be shouldered by the Chinese firm but by private companies and Northrail itself,” says the book on page 24, citing a NEDA report.
In addition, the contract price has increased to $1.3 billion, from $1.18 billion originally. But because the $500 million will no longer be shouldered by China, Newsbreak adds the figure to the total project cost, bringing it to $1.8 billion.
All of these changes are contained in a supplemental agreement signed in 2009, and Newsbreak’s central point is that this is an Arroyo failure because she agreed to and personally approved these changes in a Cabinet meeting. This is Newsbreak’s case.
But let us look at the wider picture. China funds the project, meaning that it loaned $900 million to the Philippine government. China requires that only Chinese firms may build the railway which is, after all, funded by China. China changes its mind, saying it will no longer pay for certain things, will only build up to here. Arroyo, with hands tied by the prior commitment to China, signs up.
I think that Newsbreak’s complaint should be laid at China’s feet. One can say volumes about the issue, but it all boils down to this: if you agree to a Chinese-funded project, you are hostage to China. Cultivating an economic relationship with China is risky, as Newsbreak has found. The most that you can do is mitigate the pain.
2. NAIA Terminal 3
Arroyo’s error in this matter is that she filed an expropriation case against PIATCO, potentially costing the government $400 million, “[a]gainst the advice of Solicitor General Alfredo Benipayo” (p. 40).
But context always helps. The cancellation of PIATCO’s contract in 2002 brought two lawsuits against the government. “Fraport filed a case with the World Bank’s International Center for the Settlement of Investment Disputes (ICSID) in Washington, while PIATCO submitted a request for arbitration with the International Chamber of Commerce (ICC) in Singapore” (p. 36).
This means two things:
a. The government is exercising its rights within the borders of the Philippines to use the legal system to recover property that is entirely its own. In international forums, the Philippine government is the defendant; domestic courts must not be deprived of their say.
b. More important, it hastens things. Filing the expropriation case gave an incentive to PIATCO to stop further action against the government in opening the terminal. Anyway, the expropriation case can be withdrawn by the initiating party, the Office of the Solicitor General. Given the favourable rulings in the international forums, the withdrawal can be done more easily.
Therefore, when all is said and done, President Arroyo was only doing what she could to move things along. It is not a failure of leadership; it is an exercise of leadership. That is the lesson that Aquino could learn very well indeed.
3. Metro Rail Transit 3
Newsbreak’s reklamo is that Arroyo failed to raise ticket prices, in a crass, populist move. But if she had raised prices, would Newsbreak have praised the action? Or would it have declared it as another failure, a move that does not help the poor at all?
What is particularly grating is that this project lands on this list. It was during the Arroyo Administration, as reported in the book, that government banks LBP and DBP took over the MRT Corp. This eliminated the risk that foreign or private creditors would demand a full price on their MRT bond holdings, and stabilized the situation by allowing the government to explore its options without pressure.
None of this is a credit to President Arroyo in an “independent” report by Newsbreak.
4. Subic-Clark-Tarlac Expressway
Even Newsbreak could not disguise the fact that this highway is being used already by motorists, has been privatized fully, and is being managed by mutually supporting private and public organizations. The only reason this lands on the failure list is that Newsbreak needs to fill out the number 7 on the list.
5. Mt. Diwalwal
Arroyo’s actions in this matter are described thus (p. 98):
In 2003, Arroyo created the Task Force Diwalwal to address the environmental, social, and peace and order problems in the reservation area. The task force was tasked to formulate policies that will normalize the situation in the area. She also established the Natural Resources Development Corp. (now the Philippine Mining Development Corp. or PMDC) that was tasked to develop Diwalwal’s mining potential. It managed to carry out an exploration program to determine the remaining reserves in the two major gold veins and other ore bodies.
Because this action is so difficult to label as a failure, Newsbreak instead links this with the NBN-ZTE scandal (p. 99):
It did not help that the Arroyo administration was found in late 2008 to have signed a memorandum of understanding with ZTE, the Chinese telecommunications equipment maker that also figured in the $239-million national broadband network project bribery scandal, on developing Diwalwal. Although the MOU was not executory, it added to the distrust of the PMDC and the Arroyo government among small-scale miners and local officials in Diwalwal.
I think that these tendentious writings speak for themselves. Against the insinuation regarding ZTE, the action to create a Task Force totally fades away into “failure.”
Thus spake Newsbreak.
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