Thursday, February 26, 2009


The World Bank report on bid rigging and other corrupt practices in connection with the national road construction project did not reveal, but merely provided evidence of a long standing practice in infrastructure projects by the government. The interviews of the WB Integrity Vice President detailing the bid rigging and pay-off to the politicians, recently provided by Sen. Panfilo Lacson, is not something new to us.

It is a well-known fact that corrupt politicians, from the municipal to the national level, always have cuts (better known as "commissions") in various infrastructure projects being implemented by them. It all starts with the bidding process. Prospective bidders for a project, who usually know each other, will agree on the winner, with the losers receiving a pay-off. A variation of this is that the favored bidder - because it offered the most attractive commission to those implementing the project - will be tipped-off with the winning bid price. To the contractor this latter scheme is more favorable because it reduces the cost of bribery.

Still another methodology is for the bid administrators not to soil the bidding process, allowing it to go smoothly until the awarding. Feelers will be sent to the winning bidder-contractor to put up "facilitation fees" before the project is awarded. Of course, nobody among the bidders knows yet who won the bidding. This is to insure against the winner not giving in to the project administrators' demands; if the winner refuses, they could always approach the other bidders who may only be too happy to oblige.

Now that the favored contractor has been awarded the project, it's time to line the pockets of the public officials in charge of the project. In most cases, I would assume that the pay-off comes earlier since it is easier to have leverage pending award of the project.

The first scheme is what is known as the "everybody happy" system. Everybody - from the bid participants to the public officials in charge of the project - gets his cut. Investigators from the FBI anti-corruption task force and Ombudsman should take heed of this system as from here, they could extract evidence from unsatisfied participants; there could be instances when somebody complains for not getting paid well. So much for "everybody happy."

The contractors involved in these corrupt practices are as guilty as the scheming public officials. Their willingness to give commissions perpetuate these dirty practices. I have yet to see one brave soul from these contractors, despite the pervasiveness of the practice, come out and positively identify corrupt public officials. Obviously they want to protect the profitability of their industry. And how, one might ask, do they still profit from these tainted projects for having already shelled so much money for bribery? Just look at the quality or costs of our infrastructure projects: either we are cheated out of the quality of their materials or their prices are bloated.

These substandard infrastructures are yet again the source of corrupt money that will soon line the already deep pockets of contractors and crooked politicians. Is it still a wonder that the repairs of our roads and bridges never stop? So the cycle of corruption goes on.

The inconvenience and danger of this can readily be seen. Our already messed up traffic system gets further clogged, delaying movement of goods, supplies and people. The saddest part is lives are put in danger. When substandard buildings or bridges collapse people will get hurt or even die.

In the end, the WB report will probably remain only with what it is: a report. Corruption in the infrastructure area is so pervasive that I doubt it very much there would be many public officials who would be willing to pursue it. It is a very lucrative industry and one of the major sources of ROI, and at the same time capital, for those extravagant campaign spendings. Just do the math and see for yourselves how paltry the salaries of public officials are vis-a-vis the expenditures they incur to acquire and maintain power.

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