Love of money is the fruit

Who the flock really owned UGEC, the controversial United Graphic Expression Corp.?

It was the obvious question about private entity UGEC that our beloved government hired some two years ago to produce millions upon millions of expensive high-tech microchip-loaded e-passports.

Back in 2015, government printer Apo Production Unit obtained from the Department of Foreign Affairs the exclusive right to make the e-passports.

Even at that time, we already questioned the capability of Apo to make those passports by the millions, and we wrote about our concern on June 20, 2015, in our column “Love of money is the route.”

At that time, Apo had contracts from government outfits to produce cigarette stamp taxes, vehicle plate stickers and seaman’s book. Apo could not deliver on those contracts on time. In fact, Apo was very much delayed in fulfilling them.

As it turned out, according to reports, Apo simply farmed out its big fat contract on the e-passport from the DFA to that private firm, UGEC. Of course nothing could be intrinsically wrong in the joint venture between a government unit like Apo and a private corporation like UGEC, even if it involved a contract worth some P25 billion.

But who the flock really owned UGEC, and how come nobody could yet say who?

From what I gathered, to explain the spate of bad news on the joint venture between Apo and UGEC, some Apo officials claimed that a well-funded “demolition job” was behind it.

Supposedly, another group wanted to get the fat contract. Well and good! Nobody could deny that the deal between Apo and UGEC, kept secret in the past two years, really had a terrific smell.

For one, Apo reportedly would have only 10 percent interest in the venture, while the mysterious UGEC would corner the remaining 90 percent.

From what I gathered, UGEC would provide the printing technology and the materials, while Apo would put in noncash assets such as the land and the building.

As I said in 2015, Apo did not have the expertise on e-passport. You know—encoded images, ultra thin holographic laminates and microchips.

But the biggest asset of Apo in the joint venture should have been none other than the fat rich contract with the DFA.

In a way, Apo even had to wrest the e-passport contract away from the Bangko Sentral ng Pilipinas, which made the machine-readable passports since 2007, plus the high tech biometric passports starting in 2009.

The DFA boss in 2015, former Secretary Albert del Rosario, did not even like the idea to award to any private company the e-passport production.

Now, a ranking official in the Presidential Communications Operations Office under the Aquino (Part II) administration personally pushed for the deal, with the flimsy excuse that the BSP was busy with other jobs.

As for the other government printer, the NPO, the National Printing Office, they said it was also preoccupied with the production of Comelec materials for the 2016 elections, perhaps including extra cheating ballots.

Anyway, if it was any indication, the principled Del Rosario himself did not sign the contract; he left it to one of his undersecretaries.

From what I gathered, the booklet in the e-passport would cost about P200, and the microchip, about P100. The DFA estimated it would have to process more than five million applications for passports every year, charging about P950 each.

And so the contract margin —the fruit of the labor—could be a mind-boggling P2.55 billion a year.

It so happened that, in 2015, the DFA awarded to Apo a contract for 10 years, bringing the potential amount of the deal to more than P25 billion.

And the fruity Apo would only get P2.5 billion of it, while the clever UGEC would run away with P22.5 billion?

Where was the Commission on Audit in all this?