Justice Secretary Menardo Guevarra on Thursday defended the requirements set by the National Telecommunications Commission for selecting the Philippines’ third telecommunications player.
He said the provisions in the Terms of Reference for the bidding procedures set by the NTC were legal and were not violating any laws.
One of the bidders is questioning some provisions in the Terms of Reference before a Manila Regional Trial Court.
Guevarra said the legality of the Terms of Reference underwent a thorough review by the Justice department, and that the government had opposed the bid of businessman Mel Velarde’s NOW Telecom Co. Inc. before the court to strike down the requirements.
“We are opposing the petition to stop the bidding for a third telco. The OSG [Office of the Solicitor General] has been tapped to represent the NTC in the NOW Telecom case as statutory counsel for the government,” Guevarra said.
He said the OSG was specifically defending the NTC’s position that the terms under its Memorandum Circular 09-09-2018 had a legal basis.
In answering NOW’s petition before the Regional Trial Court, the government said that the P700-million participation security, the P14 billion to P24-billion performance security, and the P10-million non-refundable appeal fee were all necessary in the determination of the financial eligibility of the bidders and not extortionate as alleged by NOW Telecom.
The NTC said the third telecoms player must not only be technically capable but should also have the “financial muscle” to compete with the telecoms giants Globe and Smart.
The NTC, through the OSG, said the participation security was aimed at ensuring the participation of serious contenders who had the required financial capability to be a third player to compete with the duopoly. It said the participant was given certain options on what form it wiched to put up the security such as cash, bank drafts or letters of credit.
The performance security seeks to assure the government that the third telecoms player will deliver its commitments for the five-year commitment period. The requirements for cash deposits had been removed and the participant had been given options as to the forms provided in the Terms of Reference.
Besides, the NTC said, the appeal or protest fee was a usual item in the procurement processes, which would discourage frivolous motions and protests.
The agency also said the securities and fees being imposed were consistent with the bidding and procurement processes, and were actually even lower than those set by Republic Act 9184 or the Government Procurement Reform Act.
The NTC also denied NOW’s allegation that the commission did not hold consultations in approving the Terms of Reference, saying it was the “result of public consultations and hearings, a review by the Oversight Committee and lengthy and comprehensive studies with international consultants,” and that “public and stakeholders also had the opportunity to submit their position papers on the matter.”
Meanwhile, Guevarra welcomed the decision of Manila RTC Branch 42 Judge Dinnah Aguila-Topacio to deny NOW’s plea for the issuance of a temporary restraining order.
“The denial of the application for TRO allows the NTC to proceed with the bidding after the deadline for submission of bids on Nov. 7,” he said.
NOW Telecom is one of the 10 companies and consortia that have participated in the bidding to be the third telecoms services provider here and has and paid a P1-million participation fee. Its mother firm, Now Corporation, only had an operating income of P6.3 million in 2017.
The nine other bidders so far are Chinese state-owned firm China Telecommunications Corp., Austrian firm Mobiltel Holdings GmBH, Dennis Uy’s Udenna Corp., the joint venture of businessman Chavit Singson’s LSC Group of Companies and TierOne Communications, Norway’s Telenor Group, Philippine Telegraph and Telephone Corp., former congressman Felizardo Colambo’s AMA Telecommunications, and two undisclosed companies.
Streamtech Systems Technologies Inc. of former senator Manny Villar, which recently secured its franchise to operate, is also reportedly joining the bidding to be the third telcoms services provider in the Philippines.
Last month, the Manila RTC denied NOW Telecom’s plea for the issuance of 20-day temporary restraining order for “lack of urgency in the meantime justifying such a provisional remedy.”
The court instead heard the case on Oct. 23 and 24 before deciding on the petitioner’s plea for the issuance of a preliminary prohibitionary injunction.