Sabotaging Air Safety

Malaya

Saturday, December 5, 1998

By J. A. DE LA CRUZ

THE net effect of a vicious media campaign against implementation of the existing contract with the UK firm GEC-Marconi for the supply and installation of a 3D radar system is to open up the Estrada administration to potential suits and, more importantly, make our skies even more dangerous for air travel than they already are.

All the loose talk about this transaction having been undertaken under less than salutary circumstances is just that: loose talk. While it is true that then President Ramos decided to hold in abeyance the implementation of the approved contract pending the results of a Senate investigation, the contract remains in full force three years after its signing. Thus, when top UK officials called on President Estrada to inquire why the contract remains unimplemented he was left with only two choices: to accept it with improvements or set it aside altogether.

The DOTC has recommended implementation of the 1993 contract on three grounds: a) urgent and critical considerations of air safety; b) the concept of joint use of the system by the DOTC and the DND was superior to other proposals and remains a viable option and c) the funding arrangement for the contract which boasts of a very attractive loan package and recoverability of investments over a limited period of time is advantageous to the government. The latter consideration is vital to this project for without such a funding proviso the more learned expositors to the project claim that the contract entered into by the Ramos administration was void from the very beginning. The DOTC claims that the bulk of the US$133-million GEC-Marconi contract, 85 percent to be exact, will be funded out of the proceeds of a loan which the government also contracted in 1995 with another UK company, Midland Bank Public Limited at the highly preferential interest rated 5.95 percent per annum. In addition, GEC-Marconi stipulated under its contract to recover for the country no less than US$30 million per annum for so-called overflight fees from aircraft using RP air space which has not been captured due to our lack of a 3D system. In other words, this project is self- liquidating and will in fact provide positive cash flow in foreign exchange for our treasury upon the payment of the loans.

It would be downright stupid to delay its implementation just because some self-interested groups which include other suppliers have been busy fanning the fires.

One such supplier, a French company which had been tapped earlier to provide a radar system which sources say remains in crates in some warehouse somewhere, has been busy peddling tales of overpricing, over-design and the like. The inability to produce a coherent and well studied opposition to this critical undertaking is at the heart of the viciousness which has attended the contention of the DOTC and the Chief Presidential Legal Counsel in their latest report to the President that the deal is not only advantageous to the government but is actually still legally in effect.

If, as the expositors say, they are concerned about the legality, reasonableness and uprightness of the contract, they should start debunking the merits of the project.

It is time the Civil Aeronautics’ Board (CAB) put its foot down on this intransigent paper airline called CLA Air Transport. This company which is supposed to be a 51-49 joint venture between Filipino and Japanese investors which includes the government-owned PADC was able to wangle a number of extraordinary privileges and some provisional authorities to operate as an all-cargo airline in the last days of the Ramos administration. Lately, it has gone to town challenging the CAB and demanding via steaming full page paid advertisements that it be rewarded authorities and privileges which were earlier issued on a provisional and conditional basis. What gall. After failing for months to show proof of its ability to implement its earlier approved provisional authority to operate as an all cargo, it now has the temerity to demand "kid glove" treatment from the CAB.

Instead of succumbing to this blackmail, the CAB should immediately ask the company to desist from making a fool out of itself in public and start working on its provisional authority. There is just no way that the procedures can be cut or dispensed with, especially under this administration. If the CLA people think they are still working as if they own the world like the old Ramos days they have another think coming. They can no longer bamboozle people around and strut their wares as if they can fly an airline just by invoking the name of Malacañang big shots.

For a start, why doesn't CLA gets its first flight off the ground? That way they can show the CAB that they are for real. Otherwise, they should banish all thoughts about getting their way just because they have the money to come out with full page ads.