Chinese firms secure road contracts

PUBLISHED : Saturday, 24 September, 2011, 12:00am
UPDATED : Saturday, 24 September, 2011, 12:00am


Four Chinese construction firms quietly got the go-ahead last month to build and repair World Bank-funded roads in the southern Philippines - projects worth 2.7 billion pesos (HK$485 million) - before President Benigno Aquino's visit to China three weeks ago.

During his visit, Aquino urged Chinese firms to bid for US$500 million worth of projects to be funded by the Japan International Co-operation Agency, Philippine Public Works Secretary Gabriel Singson told the South China Morning Post.

Aquino flies to Japan tomorrow to discuss more investments, soft loans as well as maritime security and the South China Sea dispute.

The Philippines' efforts to entice Chinese companies comes after a pay-offs scandal that saw four Chinese corporations blacklisted from World Bank projects two years ago. Four other Chinese firms were initially awarded rights to the public works projects in February - the first time since that episode, said Carlos Mutuc, director of World Bank-funded projects at the Philippine Department of Public Works and Highways.

The contracts went to: Hebei Road & Bridge Group Co (549.6 million pesos); Qingdao Construction Group (623.6 million pesos); China International Water & Electric Corp (977.5 million pesos); and the China Henan Shuili Yiju Co (512 million pesos).

There was a difference of between 30 million and 65 million pesos in the firms' bids and the actual contracts awarded for the projects in February.

Aquino assured Chinese businesspeople during a forum in Shanghai on September 2 that he would give Chinese firms 'a level playing field' and that they would not have to bribe state officials to win contracts.

He vowed that 'each contract signed and each project completed will stand firmly on the bedrock of integrity - in other words, where every contract represents the five 'Rs' we envision: right project, right cost, right quality, right people and right on time. This is the only way to ensure that your projects will not be questioned by the public, or by succeeding administrations.'

Singson, who witnessed Aquino's speech, said the Chinese entrepreneurs there had been 'very encouraged' by the promise.

'In fact, we arranged for the Chinese contractors [who won the road projects] to meet the president to send precisely that message - that it's a new ballgame ... That we want good-quality projects,' Singson said.

Two years ago, Japanese contractor Tomatu Suzuka told World Bank investigators that 'money would have to be paid as high up as the president, senior government officials and politicians in order to do any further business in the country. To win a contract, it would be necessary to pay the head of the bureau and politicians several million yen.'

Total payoffs came to between 15 and 20 per cent of the project cost, the World Bank report later said. Aquino, who was then a senator, was among those who pursued a legislative probe of graft in World Bank projects.