Misapprehensions

“NAKURYENTE” (rough translation: they got scammed… or victimized by a hoax). That’s the kindest explanation one can give for the seeming misapprehension of the facts in regard to the acquisition of fire trucks—one set of eight through bidding, and another set of 76 through official development assistance (ODA) from the Austrian government.

One such misapprehension is that the Austrian trucks (brand name: Rosenbauer) will cost the Filipino people close to P20 million each, in contrast to the P9 million that is being paid for locally supplied fire trucks. The P20 million figure is apparently derived by dividing the peso value of the Austrian loan (20,493,740 euros times P65 = P1,332,093,100) by the number of trucks (76) to get the unit cost per truck (P17.527 million). To this is added the cost of duties and taxes, plus the cost of administering the project, both again divided by 76, and you get a figure close to P20 million.

On the other hand, P9 million (P8,998,888, if one wants to be tiresomely accurate) is based on the value of a repeat purchase order of the Bureau of Fire Protection (BFP) dated April 23, 2010.

The comparison seems rather straightforward. So why call it a misapprehension? Because comparing the P20 million (more correctly, P17.5 million, because in a government-to-government transaction, taxes and duties do not apply) to the P9 million figure is like comparing bananas and santols. Why? Because the locally purchased trucks, at P9 million per, were paid for in cash upon delivery, or close to it. The Austrian trucks will not be paid for up-front (which would have justified the P17.5 million figure), but in 14 years, the first payment to be paid only after three and a half years (called the grace period), at—are you ready for this?—1 percent interest per annum. What is needed therefore is to calculate the present value of that stream of payments over the next 14 years. And it comes out to P7.01 million for each truck.

That is the nature of ODA. It is concessional, it has a grant element. And the Department of Finance has calculated the grant component of the loan to be roughly 60 percent of its value, because while the loan is P1.3 billion, its present value is P532.8 million, or roughly P7 million per truck. This is what must be compared to the P9 million cost of the locally produced truck. And which is why we should grab the opportunity, considering that Rosenbauer trucks are supposed to be the Mercedes-Benz of fire trucks and at the price that is practically a steal.

It is noteworthy that at P9 million each the trucks we have been paying these past eight years seem grossly overpriced. The Approved Budget Contract (ABC) for the purchase of eight trucks scheduled to be bid out yesterday is only P6.2 million per truck (as estimated by the new administration), or only two-thirds of what the past administration paid—and for a much better product at that. So what Congress should be investigating is not the Austrian deal, but why: (1) the previous administration was paying one and a half times more than what the Aquino administration expects to pay, and (2) why—and this is at least equally interesting—one company, to quote Interior Secretary Jesse Robredo, “has virtually monopolized (through direct contracting) the supply of at least 286 units worth over P2.02 billion…” between 2002 and 2010.

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The kind of misapprehension discussed above is quite common in a political muckraking milieu. While it cannot be excused, it can be understood (rent- or reelection-seeking). But it is neither excusable nor understandable in the University of the Philippines milieu. Worse, the misapprehension must be deliberate, because a “dumb academic” is an oxymoron. Unfortunately, the Avila-Pineda dismissal case illustrates just such a misapprehension, something that should not be condoned in academia, much less the state university.

My previous two columns have focused on the case, but a complainant has written to accuse me, implicitly or explicitly, of malice and ignorance. If it is malicious to defend two academics, one of whom (Avila) I am not personally acquainted with, from unjust dismissal from the university, then I plead guilty. If it is ignorant to reach my conclusions after plowing through all the legal documents available—complaints, amended complaints, manifestations, charges, recommendations, decisions, and most recently, the appeal of Dean Enrique Avila and Prof. Ernesto Pineda to the Board of Regents—then I am delighted to plead guilty to that kind of “ignorance.”

An example (and there are many) of inexcusable and deliberate misapprehension (which is why I called it a trumped-up charge):  Avila was found guilty of “gross neglect of duty for summarily and recklessly granting the request of Green Peaks to utilize a portion of the UP lot … as a temporary stockpile area for excavated earth materials … without compensation, in willful disregard of his duty…”

Where does the deliberate misapprehension come in? The area in question, lower by around one meter than its surroundings, was the subject of a project proposal for back-filling and compaction in 2006, at an estimated cost of P5.5 million. It couldn’t be undertaken because there were no funds for it. The Green Peaks request was a godsend, because it included the offer to use the excavated soil to back-fill and compact the area. Which would save UP at least P5.5 million, right? Plus UP asked for and got five truckloads of garden soil to be used for other campus areas.

No compensation? Not in the interest of UP Cebu? Meriting dismissal? Hello?