Tough call on Calax rebidding

Barring any last minute change of mind by President Aquino, the P35.4-billion Cavite-Laguna Expressway (Calax) project is going back to the bidding table.

It will be recalled that last June, Team Orion, a joint venture between Ayala Corp. and Aboitiz Land Inc., won the bid for the project with its P11.66-billion offer. Optimal Infrastructure Development Inc., an affiliate of San Miguel Corp., was disqualified from the bidding because the validity period of its bid bond was four days short of the required 180 days.

Although the bond issuer confirmed that the bond was good up to the prescribed period, the project proponent, the Department of Public Works and Highways (DPWH), disqualified Optimal. Shortly after the award was made, Optimal publicly disclosed its bid, which turned out to be P8.44 billion more than the winning bid.

The big disparity in amounts prompted Optimal to appeal to the Office of the President to reconsider the award.

Citing the possible negative effect on foreign investments of a reversal of the award, several foreign and local business organizations urged the President to uphold DPWH’s action. The Philippine Chamber of Commerce and Industry, however, expressed its support for a rebidding of the project.

In ordering a rebidding, the President said it was the most fair thing to do and in the best interests of our people. Given a choice between losing investor confidence in the government’s bidding process and “forfeiting” at least P8.44 billion that Optimal was willing to pay, the President opted to go for the money rather than maintain the integrity of the process.

From a practical point of view, the President cannot be faulted for wanting to extract the most value possible from a roadway project. The President was probably aware that either way he goes on this issue he will be criticized, or probably haled to court.

It is not farfetched that if the award of the Calax project to Team Orion was left undisturbed, the President would be pilloried for missing an opportunity to earn more money for the government.

The amount of P8.44 billion is a lot of money that, when properly used, could fund, for example, the construction of more school buildings or housing facilities for victims of natural calamities.

Without a rebidding, the “lost financial opportunity” could be cited as justification [no matter how flimsy] to file a complaint with the Ombudsman against the DPWH officials concerned, in lieu of the President who is immune from suit while in office, for entering into a contract or transaction that is manifestly and grossly disadvantageous to the government.

As a result of the rebidding order, the President’s stock in the local business community may go down a notch. But that should not be a cause for worry for him because that displeasure will eventually dissipate.

For taxpayers, the additional benefits or premium that may be reaped from a rebidding may be worth the price of straying from strict compliance with government bidding rules, at least for the Calax project.

The decision to rebid is a setback for Team Orion. It won the bid fair and square. Although Team Orion has reason to feel bad, it is not expected to criticize the President’s decision or go to court to contest the legality of his action. The Ayalas have a long history of good relations with the Aquino family dating back to the late President Cory Aquino. Indicative of Team Orion’s deference to the President is its earlier suggestion that he simply decide on who should get the Calax project and that it would abide with his decision without question.

A loss for Team Orion in the rebidding is not going to be a big deal for the Ayalas and Aboitizes. There are other big-ticket projects in the pipeline in the administration’s remaining two years.

The brownie points they will earn from the administration for not rocking the boat on the Calax project can be put to good use in the future.

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