Paying it forward

Call this latest government caper as paying it forward. A private consortium that won the bidding for the contract of the Light Rail Transit 1’s  Cavite Extension project  is going to be paid P7.5 billion in fine even when the firm has not started work.

Leyte Rep. Ferdinand Martin Romualdez of the independent bloc in the House is demanding an explanation from the government on why it’s compensating the consortium for unfulfilled obligations as part of the concession agreement. If the penalty clause was in the concession contract signed with the consortium of Ayala Land and Metro Pacific Investments Corp., why did the government agree to it? What were these obligations on the government’s part? Normally, it’s the winning contractor who has certain obligations to fulfill and the one fined if it is not able to meet start-up timeline and the deadline to complete the work on the project. Clearly, whoever negotiated the contract with the concessionaire failed to protect the public’s interest.

“It’s unconscionable how the government is wasting the people’s money even when the mass transport system continues to deteriorate,” said Rep. Romualdez. When seen against President Benigno Aquino’s rejection of a proposed income tax cut for workers, Romualdez is right to question why government is paying the hefty fine. He was joined in calling for a House probe by Buhay Party List Rep. Lito Atienza, Abakada Rep. Jonathan de la Cruz and Bayan Muna Rep. Neri Colmenares who want to summon Transportation Secretary Joseph Emilio Abaya to explain.

Abaya is still not over the hump for his mismanagement of the Metro Rail Transit and the deal that allowed former MRT manager Al Vitangcol to award a multi-million service contract to a firm of a relative without any experience in railway maintenance. Vitangcol was fired as MRT manager for the alleged extortion attempt of a Czech company that was bidding to supply additional carriages and upgrade systems equipment for the ailing public commuter railway. Supervision of the MRT falls under Jun Abaya’s DoTC. We are not going to speculate on whether politics is behind these two railway deals just because Abaya is acting president of the ruling Liberal Party which claims it has more than enough campaign funds for the 2016 presidential elections.

Atienza called the fine a case of “programmed default” to benefit the winning consortium which is going to make P7.5 billion ahead and apart from the cost of the lucrative deal it won.

Chinese warships in Alaska waters

News reports of Chinese warships’ intrusion into US waters off Alaska is disturbing. One newspaper headlined it as Chinese warships “wanderlust.” It’s a blatant case of trespassing. What else can you call it when a foreign vessel intrudes into another nation’s 200-mile economic exclusion zone under the United Nations Convention on the Law of the Sea?

The Chinese warships glided into Alaskan waters at a time President Barack Obama was in the northeast US territory on a visit to warn against climate change.

He should have also warned China to stay away after he had received intelligence report of the Chinese intrusion. Let’s see what China will do after the US announced its own warships will make a pass-by on Chinese-built islands on the South China Sea, a flash point of the territorial dispute between Beijing and its neighbors in the Association of Southeast Asian Nations.

Beijing may be able to bully its smaller neighbors in the region as it advances its claim of nearly the entire South China Sea with its nine-dash line. But can it risk a confrontation with a Pacific naval power like the US whose Seventh Fleet of  modern aircraft carriers are constantly patrolling the region?

How much further will China dare to push its aggression before the US takes an adequate and appropriate response? This, against the backdrop of a floundering Chinese economy. Premier Li Keqiang sought to assuage fears of an economic slowdown the ripple effect of which is already having repercussions on the world economy. A big chunk of the Chinese national budget goes into defense spending as shown by its massive military hardware displayed during the recent military parade in Beijing With the economy in a slump, will the ruling clique of President Xi Jinping sacrifice social services for its restive populace to continue feeding the Chinese war machine?

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