SC stops ZTE deal

PHILIPPINE NEWS SERVICE — THE Supreme Court yesterday issued a temporary restraining order stopping the controversial broadband deal entered into by the government with a Chinese firm.

Covered by the order were the National Economic and Development Authority, the NEDA Investment Coordination Committee, the Department of Transportation and Communications and all persons acting on their behalf.

The parties were enjoined from pursuing or entering into indebtedness, disbursing funds and otherwise implementing the broadband project with ZTE Corp.

Iloilo Vice Gov. Rolex Suplico filed the taxpayer suit last July seeking to nullify the $329 million contract granted to the Chinese firm.

Suplico said the deal violates the Constitution and existing laws on public transparency, accountability and Filipino self-reliance. He said the contract between the DoTC and ZTE Corp. should be nullified because it violates the constitutional provision which provides that sovereign loans and guarantees require the prior concurrence of the Monetary Board, the governing body of the Bangko Sentral ng Pilipinas.

The former congressman said the transaction was carried out without a public bidding. The deal also violates the Build-Operate- Transfer Law which provides that in case of unsolicited proposals “no direct guarantee, subsidy or equity is required.”

He added that the deal is also contrary to the government telecommunications policy and a violation of the Telecoms Policy Act which ordered the government since 1995 to privatize all its telecoms facilities.

The local company that also wanted to build the project, Amsterdam Holdings Inc. also asked the Supreme Court Monday to stop the deal and to compel Malacanang to provide it a copy of the controversial contract.

Jose de Venecia III, AHI co-founder, earlier revealed that Commission on Elections Chairman Benjamin Abalos offered him $10 million so he will back out from the project. The contract was signed by DoTC Secretary Leandro Mendoza and ZTE vice president Yu Yong on April 21, 2007.

The Department of Justice earlier said the project was legal.

The broadband project is to be the “backbone” of the government’s on-line presence nationwide, through a wireless network that will initially provide connectivity for the Cyber Education Project of the Department of Education.