Illegal termination of BOT contract

-          BOT Agreement between DFA and BCA International Corporation was signed on Feb. 8, 2001 after public bidding.

-          BOT was initially entered into by the DFA to comply with the 2010 deadline set by the International Civil Aviation Organization (ICAO) standards for travel.

-          BCA finished Phase 1 of the project on August 13, 2001. Machine Readable Advisory Board (MRPVP) of the DFA recommended issuance of acceptance of Phase 1 on June 10, 2002.

-          Dec. 9, 2005, Notice of Termination from DFA, upon instructions from DFA Sec. Romulo, terminated contract with BCA International Corporation for the procurement of machine-readable passports.  Notice was served on BCA immediately the following day.

-          DFA went on with the termination despite reservations raised in writing by the MRPVP on the legality and justification of its termination.

-          Termination of contract was illegal, arbitrary, did not undergo due process and violated laws, particularly the BOT Act and the Amended BOT Agreement

-          Because BOT contract was terminated, e-passport procurement was not anymore without  government expense. DFA entered into a Memorandum of Agreement with the Bangko Sentral ng Pilipinas for the latter to facilitate public bidding for a new contract.

-          In the MOA, DFA agreed to “reimburse” BSP P857M in case the project fails to push through.

-          In the 2010 national budget, P1.4 billion was allotted to the DFA for the implementation of the e-passport project on top of the P530 million loan secured by Romulo from the Development Bank of the Philippines (DBP) for the construction of the new 7,000 square meter and four-storey building facility at the Mall of Asia for the e-passport project.

Overpriced laminates

-          Before the “Notice of Bidding” could be conducted by the BSP, the DFA entered into a negotiated or no-bid MOA with French company Hologram Industries for the procurement of passport laminates at the price of 0.87 euros per laminate.

-          However, it was found out that Hologram offered same passport laminates in a bidding in Mexico last Aug. 1, 2007 at only 0.24 euros per laminate. Another company in the same bidding, Trautwein Security Gmbh &&Co, offered the same passport laminates at $0.17 or 0.11 euros per piece.

-          Projected cost of overpricing: If three (3) million are issued annually, the DFA gets at least P120 million a year extra (“tongpats”), P50 per laminate, from the acquisition of laminates alone!  This is ON TOP of costs for chips, paper, and other materials used for the manufacture of e-passports.

Unethical contract with Oberthure

-          DFA Asst. Sec. Domingo Lucenario travelled with Philippine representative of French company Oberthure Mr. Fai Chua to Europe during the course of the bidding. This is a clear violation of Sec. 3 of RA 3019 (Anti Graft and Corrupt Practices Act), RA 6713 (Code of Conduct and Ethical Standards) and RA 9184 (Government Procurement Act)

-          Oberthure participated in the first stage bid, and was eventually included in the 3 pre-qualified bidders released by the BSP. Eventually, the P857 million e-passport contract was awarded to Oberthure.

-          Oberthure was the same company which printed the erroneous “Arrovo” bills.

-          Oberthure was also involved in a $34 million passport scandal in Kenya.

Related actions:

-          The College Editors Guild of the Philippines (CEGP) filed a case before the Ombudsman on grounds of graft and corrupt practices and overpricing in 2007.

-          2008, CEGP filed a motion to intervene before the Supreme Court.

-          2009, Kabataan and Anakpawis Partylists filed resolutions to investigate the contract.

To sum up:

1. E-passport contract is illegal, unethical and has unresolved corruption complaints filed before the Ombudsman, Supreme Court and the 14^th Congress. DFA Sec. Alberto Romulo had since refused to tackle the issue and allegations hurled at him head-on.
2. The e-passport contract is grossly overpriced giving the DFA no right to arbitrarily increase e-passport fees.
3. Romulo has squandered millions of pesos in corruption via the e-passport project when the DFA had failed to provide welfare services, protection and assistance to OFWs, especially those in distress and facing death row.
4. OFWs are also questioning the “selective” imposition of fees, mainly in countries where Filipno migrants are concentrated.
5. The arbitrary collection and imposition of the e-passport fee is another big economic burden being exacted by the Philippine government on OFWs during this time of crisis.
6. OFWs and passport applicants also complain of the slower and more inconvenient new process for e-passport application.

Stop increase in e-passport fees!

Investigate Romulo and Arroyo for e-passport overprice! Recall Romulo appointment as DFA head!

Stop exorbitant state exactions on OFWs!