Zte Scandal

The case of the ‘missing’ ZTE broadband contract

FOLLOWING the Supreme Court order stopping the implementation of the $330-million National Broadband Network (NBN) project, an opposition senator challenged Cabinet members to reveal the truth behind the controversial Philippines-China deal. (See the temporary restraining order issued by the Supreme Court.)

In a privilege speech today, Senator Panfilo Lacson claimed he has in his possession copies of both the original and reconstituted versions of the contract. Last month, the Department of Transportation and Communications (DOTC) confirmed it had signed a supply contract with Zhong Xing Telecommunications Equipment Limited (ZTE) for the NBN project. Palace officials had earlier insisted that the contract, signed last April, was “nonexistent.” It was reportedly stolen in China shortly after the signing; it was later reconstituted and re-signed.

Read Lacson’s privilege speech on the ZTE contract.

Lacson said the “reconstituted” version is word-for-word similar to the “lost” original signed contract, except for the pagination on every sheet. Corroborated with the two versions of contracts the PCIJ obtained from sources, among the crucial provisions highlighted by Lacson include:

The Contract Price:

$329,481,290, which consists of:

* Price of Equipment — $194,051,628

* Price of Engineering Services — $118,605,650

* Price of Managed Services — $14,875,507

* Price of Training — $1,948,505

(all prices mentioned above are net prices, exclusive of all taxes)

Terms of payment

The NBN-ZTE deal is to be financed by the Export-Import Bank of China, and paid by the Republic through the Shenzen Branch.

Upon release of the loan, the Republic will immediately pay 15 percent of the contract price for the equipment as advance payment.

For each Provisional Acceptance of Equipment, and upon receipt of the commercial invoices, the Republic will pay 35 percent of the contract price for equipment.

The Republic...