THE United Nations Development Programme (UNDP) has returned P283.99 million to the national government due to the termination of the Free Wi-Fi Internet Access in Public Places Project of the Department of Information and Communications Technology (DICT).
This, as officials clarified that the foreign contractor that UNDP got to carry out the project for DICT was not the listed importer of the telecommunications equipment that was earlier entangled in allegations of technical smuggling. The foreign contractor, Speedcast, told lawmakers they have no license to import equipment to the Philippines and they relied solely on their subcontractor, Philippine Communications Satellite Corporation (Philcomsat) in strict accordance with their subcontractor agreement.
The amount of P283.99 million that was returned, UNDP said in a separate public statement submitted to the House of Representatives (HOR), has been returned to DICT, through the Bureau of the Treasury account. This followed the termination of the contract mutually agreed with Speedcast on May 10, 2021, relating to Phase 2.
In an e-mail to BusinessMirror, UNDP said the amount is the full figure of the Phase 2 of the project. The amount for Phase 1 of the project will also be returned but is still “in the process of accounting.”
“The phase 1 contract is in the process of being terminated at the request of DICT. Once termination is concluded and accounts of pending claims are done, we have agreed that we will return the funds to DICT,” UNDP said in an e-mail response to this newspaper.
UNDP also said that while they agreed to return the funds, DICT must ensure that the 882 free Wi-Fi sites that were installed and activated by the project should continue providing services to the 350,000 citizens these sites serve in remote areas nationwide.
These are in low-income communities of provinces such as Isabela, Cagayan, Benguet, Palawan, Davao del Sur, Lanao del Sur and Sorsogon.
Second hearing
In a statement, the House Committee on Good Government and Public Accountability chaired by DIWA Party-list Rep. Michael Edgar Aglipay convened on Tuesday for the second hearing on House Resolution 1751.
The measure called for an inquiry, in aid of legislation, into alleged irregularities and setbacks on the Free Wi-Fi Internet Access in Public Places Project implemented by the DICT.
With the Internet “fast becoming recognized as a basic human right in the country,” Aglipay told the panel in his opening remarks, it was important to finish the inquiry into how P1.3 billion of taxpayers’ money and another P500 million from the Bayanihan 2 were used.
The HOR statement said that during the inquiry, Speedcast executive James Trevelyan had said they were engaged by UNDP to import telecommunication equipment for the project.
Aglipay said that on the allegation of technical smuggling in the Bureau of Customs, Trevelyan asserted that Speedcast does not have the license to import equipment to the Philippines and relied solely on subcontractor Philcomsat.
Trevelyan likewise clarified the “inaccurate perception that somehow, Speedcast was bankrupt.” At no point was it bankrupt, but voluntarily chose to recapitalize, to restructure its business through what is known as the Chapter 11 filing under the United States Bankruptcy Code.
“The key point here is at no point during this period that SPEEDCAST ceased operation, that we ceased to pay our suppliers, or the UNDP-DICT Wi-Fi project was affected in any way. On the contrary, we provided uninterrupted service to all our thousands of customers around the world as well as the UNDP and the people of the Philippines,” he said.
Project not affected
Meanwhile, based on the statement of the UNDP, they were informed in April 2020 that Speedcast voluntarily filed for balance sheet restructuring under Chapter 11 of US Bankruptcy Law.
UNDP said DICT was informed about it in a letter dated 4 May 2020 and that Speedcast updated UNDP on the progress of the restructuring through regular meetings until Speedcast emerged from Chapter 11 in March 2021.
“Since the US Chapter 11 process is a financial restructuring aimed at reducing funded debt and gaining access to new sources of investment, it did not affect the implementation of the WiFi Project. Most of the sites [613 sites] under this project were installed during the period when Chapter 11 proceedings were on-going,” UNDP said.
“Delays in deployment cannot be attributed to the Chapter 11 proceedings, but rather to the health, safety, and mobility restrictions brought about by the Covid-19 pandemic, coupled with the challenges in reaching the target sites,” it added.
In terms of customs-related issues, UNDP said it required its contractors to abide by national laws in performing and fulfilling their obligations.
In issues related to allegations of mismanagement and other irregularities, UNDP said its policies and procedures on transparency and accountability are clear, robust and follow international standards.
In terms of alleged undervalued shipments of telecommunications equipment imported between January and June 2020 by the contractor, UNDP was made aware of the alleged irregularities in import duties by Philcomsat, on July 21, 2020.
UNDP said no evidence was produced and contacted Speedcast to take immediate action; it asked Philcomsat to clarify the matter with Speedcast. UNDP also asked Speedcast to self-report to the Bureau of Customs (BOC), to comply with national laws.
As a precaution, UNDP said regardless of the missing evidence, UNDP has referred all allegations received to its independent Office of Audit and Investigation (OAI), in accordance with policies and procedures.
“The matter, following the release of the BOC report dated 12 April 2021 and officially shared with UNDP on 14 May 2021, is now under investigation. To aid in OAI’s investigation, UNDP has requested from DICT the documents cited in the BOC report. Until the OAI investigation is finalized, UNDP cannot further comment on this matter,” UNDP said.
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