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Transcript of Lozada's Exposé

'Halika tawagan natin si FG' (C’mon Let’s call the First Gentleman)

I'd like to start by thanking a lot of people who expressed their sincere sympathy for the family. I'd like to thank them first, so many of them. And in Tagalog, nagpapasalamat po ako sa lahat ng nagpahayag ng pag-aalala sa akin at sa sampu ng aking pamilya.

Ako po'y nagtawag sa pagpupulong na ito upang mabigayan ng liwanag. Madami kasing mga katanungan ang bayan ukol sa proyekto ng NBN-ZTE na ito. (I have called this press conference to shed light. People have so many questions regarding this NBN-ZTE project)

At upang huwag na sanang mapilitan pa yung iba, marami nang mabubuting taong napilitan pang magsinungaling dahil sa akin. Hindi naman sila kasama rito, napipilitan pa silang magsinungaling. Ayokong maging dahilan na magkasala sa Diyos at sa bayan kahit sinoman. Ayoko ho iyon. (So that others will not lie those good people forced to lie because of me. They are not involved here, they are just forced to lie, I don’t want to commit more sins to god and nation and anyone else.)

Mabigat po sa aking damdamin ito at isipan, ang aking gagawin. Ngunit kailangan kong gawin ito para sa kaunawaan, para maliwanag na ang isipan ng bayan, tungkol sa mga bayan na ito na lubhang makaka-apekto doon sa kinabukasan nila.(I have a heavy heart and mind in what I will do. But I must do this to enlighten and clear the minds of our people, regarding this matter that affects our nations future.)

Ang aking ilalahad na mga salaysay ngayon tungkol sa ZTE-NBN ay yung mga bagay na ako'y may personal na ginampanan, (What I will relate is about the ZTE-NBN deal that I have personal involvement) the things that I'm involved with. And I'm going to say this with malice to no one.

Wala ho akong malisya kahit kanino man. Ang sasabihin ko ay kung ano lang ginawa namin, at kung ano ang nangyari. (I have no malice or have any towards others, just those that we did and what transpired.)

Introduced to Abalos

To my recollection of events, I'll start off the first time I was introduced to this project by Secretary Neri, monitored action to (COMELEC) Chairman Ben Abalos. I guess if it was not late September (2006?), early October I was introduced by Secretary Neri to Chairman Ben Abalos in Wack-Wack together with his entourage sina (including) Ruben Reyes…and the ZTE president Yu Yong and Fan Yang. We had lunch in Wack-Wack wherein we talked about the NBN-ZTE.

I remember that the Secretary told Chairman Abalos to course his project proposal to the proper channel. NEDA received the first copy sometime in October…prepared by…All questions were referred back to Asec Formoso.

When the Secretary gave me a copy for me to review, the first three that really caught my attention, when I was reviewing the financial cost, the financial projection were based on… September 20, 2006 issue wherein they were quoting how much government was spending for telecom expenses…

…So, I told the Abalos group, through their guy Leo San Miguel, that they should revise their proposal. They should fix it and try to avoid the education part of it, because there's already a cyber-education project.

Abalos wanted $130 million

Sometime in November, that was the time that I also met Joey de Venecia, to see the presentation on a similar project but on a BOT basis. And at that time, the Secretary asked me if the project was appropriate for NBN.

Until we presented the project proposal for the NBN, And the Secretary asked If I think it was appropriate and I said yes, so he encouraged Joey to push through the project development further.

And when the Secretary asked me if there was a synergy between the two projects I said, yes. But both of them were pitching for the same project. The Secretary told me to reconcile the two proponents. And at that point, it was really a good project.

At that point, when the Secretary told me to reconcile the two proponents, I immediately went to work and proposed one tool for the two proponents wherein both of them can achieve both of their objectives. Joey's objective was to do a BOT with government, which was completely above board, and then Chairman Abalos's objective was to do a loan, a project on a loan basis.

So the project structure that I proposed was that Joey becomes the lead contracting party to the government, it's on a BOT basis anyway. And that Abalos, to achieve his objective of supplying, becomes supplier to Joey's project.

I thought at that point it was already a win-win situation for everyone involved. The government gets its NBN project, Joey gets his BOT project, and then Abalos gets his supply comes up.

So, at one point I got them already to do their own thing. It's finished. But I guess the trouble started when Chairman Abalos wanted to protect his $130-million… how shall I put this…commission on the project. So dapat daw proteksyonan 'yong (So we should protect) $130 million, (before) we agree that Joey become the main proponent.

'Bubukol po ito' (This will create a bump)

At that point, I just felt that…it might be a little too big, in the vernacular sabi ko bubukol po ito, sabi ko siguro kalahati pupuwede. (I said this will create a bump, so maybe just half will do) But nonetheless I relayed the information to Joey, because it's going to be Joey's project anyway.

And Joey's reaction was really like ballistic, parang (like) he was worried, saan n'ya kukunin itong (where will he get) $130 million na 'to (for this), because the project cost is $262 million, and Abalos wanted $130 million na komisyon. So sabi ko sa kanila, hindi ko problema 'yan, (told them that is not my problem) that's your problem.

So at that point, I don't know if the listener can realize how much money all of these are na pinag-uusapan…$130 million…At that point, I was telling them na problema n'yo na ito basta (this is your problem) you make sure you'll get this thing together because we don't want another Atong Ang or Chavit Singson scandal to rock this country. I also made it very clear...na basta maayos lang (as long as it can be fixed). (NOTE : This shows the complicity of both Sec. Neri and Mr. Jun Lozada himself who would be willing to look the other way if the illegal commission is just US$70Million!!!)

ZTE's advances to Abalos

Sometime in December, the ZTE rep, si (this) Yu Yong at saka si (and) Fan Yang, who get quite close to me, along the progress of the work, were already getting frantic and talking to me about developments in the project, because they'd already gave enough advances daw to Chairman Abalos. So, sabi ko sa kanila, the project is moving along, they should not be alarmed.

So, it was also at this point because of Joey's hesitance to agree on the $130-million commission, that Chairman Abalos started considering doing the project on his own, derecho na siya.

Ang sabi ko ho sa kanya na hindi ho puwedeng de-deretcho kayo, kasi ang kabilin-bilinan ni Secretray Neri, na yun din ata ang utos ng Presidente, na (I told him that we cannot go direct, because that is the specific instruction of Sec. Neri) this project can only be done through a BOT basis, hindi puwedeng utang (we cannot take a loan).

'Tawagan natin si FG' (Let us call the First Gentleman)

So I was standing firm on that, na hindi talaga pupuwede (this cannot be done). At that point, that was the time that Chairman Abalos said, halika, tawagan natin si FG (come here let us call the FG). So, sabi niya, nung tinawagan niya, "pare nandito yung taga NEDA sa tabi ko, hindi raw puwedeng i-utang yung project ko". (when he called FG, “pare the NEDA people here are by my side, and they say we can’t get a loan on my project).

I cannot hear the voice from the other end, pero sabi n'ya, "kung ganyan kayong kausap", (if that is how difficult to negotiate with you) and the Chairman continues, "kung ganyan kayong kausap, ang hirap n'yo palang kausap, kalimutan n'yo na lang ang usapan natin" (If that is how hard to talk with you and how you talk, then let us forget about our negotiation).

I don't know what that meant. But the following day, totoo nga, (it is true) a letter from the Chinese ambassador came addressed to the government, and… with Mike, stating that this is already December.

'Moderate their greed'

You can check this with the records. I'm just doing this through my own recollection. But if you can check sometime December, a letter addressed to Mike yata, came in from the Chinese ambassador saying that there is now money available for a loan, for the NBN project, independent of the cyber-education project.

Kasi yung (because the) cyber-education yun ang napag-agree-han na ilo-loan na (that’s the one where there is an agreement on taking a loan). Ngayon (Now) there's another loan na naman na puwede na rin yung (again and that will do) NBN i-loan (take a loan), it was sometime early December.

So, I told the Secretary about it, Secretary Neri. And his instruction to me was very clear, sabi nya, (he said) "Jun, you moderate their greed". I was naive to accept that order. I do not know what moderating greed means, but I followed Secretary Neri.

'Pare, okay na kami sa NEDA' (we are okay with NEDA)

And due to the insistence naman nitong mga taga (of the) ZTE that the project gets going, Chairman Abalos invited us sometime on the third week of December, I'm pretty sure of the timing, over dinner in Makati Shang-rila. He asked to invite Joey as well, kasi si (because the) FG will be there with us.

Actually the First Gentlemen did not say much, except that Chairman Abalos told him na pare okay na kami nina (we are okay with) Joey, ok na kami sa (okay with) NEDA. (and the FG answered) Ah, ganon, mabuti naman, (is that so, I am glad) okay na , okay na (are you okay? Are you okay?).

So, I'm just narrating to you with no malice intended. Whatever that means, kayo na po ang bahalang umano (It is up to you to determine).

And on their trip to China, I did not join them anymore, and I guess Joey can speak on what happened in China.

Like the North Rail

Sometime in early January naman, Secretray Neri again invited us for lunch with Abalos in Edsa, in Makati-Shangrila in a Chinese restaurant together with Yu Yong and Fan Yang, the ZTE, and the Chinese commercial councilor. At that point, the Chairman again was making the impression that the project is already a go. May be there was parallel trust…because…(but) it was not yet a go.

So there was some negative reaction from the ZTE person, and the Secretary noticed some awkward moments there, and then he immediately ask a leave, and said that he had to go, and asked me to stay behind.

Chairman Abalos and the ZTE guy were in curious exchange of words, because the ZTE people were like demanding from Chairman Abalos that he promised that the ZTE deal will be done on a loan project under the North Rail. I don't know why they speak about the North Rail. I don't know why they speak about the North Rail. They keep on mentioning ala North Rail terms loan agreement.

'Alam mo bang…?' (Did you know that….?)

So, that was last meeting I had with the Chairman. And on January 18, I remember the date very well. This is the only date that I can remember because this was the date I said bye to the project.

I was then in Dumaguete in Negros, together with Henry Teves, when Chairman Abalos called me up, to some like early evening, and asked me questions like, "Alam ba ni Neri yung ginagawa mo, (I said) Opo. (yes) Alam ba ni Neri yung ginawa mo. Opo. (Does Neri know what you are doing) Alam mo bang malapit ako sa (did you know I am close with the) military. Opo (yes). Alam mong malapit ako sa (did you know I am close with the) intelligence. Opo(yes). Alam mo namang malapit ako… (did you know I am close….)

And then he started cursing. Mura siya nang mura in Tagalog lahat-lahat (He started cursing in Tagalog all throughout). At ang sabi niya, nandito sa akin yung CD lahat ng phone conversations ninyo nina Joey, mga hayop kayo, tina-traydor n'yo ko. (I have here with me the CD of your phone conversation with Joey, you animals you betrayed me)

I don't know what gave him that impression..but the fact, that they said I know the MIG 17 in ISAPF can do that, which Chairman Abalos and Ruben Reyes are …close to, I was not surprised.

So, I just took with a grain, and then Chairman Abalos ended up…his words with, "Huwag kang magpapakita sa aking hayop ka sa Wack –Wack o sa Mandaluyong at ipapapatay kita." (Don’t ever show up in Wack-Wack or Mandaluyong and I will have you killed you animals)

From $262M to $329M

That's when all my troubles started. So, I quit the project. I told the Secretary that I don't think this project is worth risking my life for. All I did was trying to help the Secretary understand it.

So on February 2007, the executive order was issued. So this is now my personal participation ended and where it ended for the project concept.

In February 2007, an EO was issued by the Office of the President, transferring the telos, the implementing agency to DOTC. And on April, the project… the NBN was approved…at $329 million.

When I quit the project, the project cost was $262 million. So it was approved. I don't know what happened then. I'm not imputing anything now. But when it was approved, it was already approved at $329 million. And the day after it was approved, the President together with PagCor officials, went to China to witness the signing of the agreement.

This project for me is one transactional example of a dysfunctional government procurement, a systemic dysfunction on how we procure projects. There are other more that have escaped scrutiny, but ganun din ang sistema (it is the same system). And I have agonized over this decision...

Ang dasal ko lang sana maintindihan n'yo yung dusang dinananas ng pamilya ko ngayon. (I pray that you understand the agony that my family suffers now) Ang dasal ko lang sana matutunan na natin after nito na ang salitang Pilpino ay hindi lang tumutkoy sa isang pamilya. (I pray that we can learn after all this that the word Filipino does not only refer to one family) Ang salitang Pilipino ay tumutukoy sa isang bansa, ang bansang Pilipino (The word Filipino that I am referring to is one nation the Filipino nation). And sometimes, it's worth taking a risk for this country.
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Note: The transcript was received thru e-mail from our sources based on the ABS-CBN coverage, Pedestrian Observer GB does not guarantee the accuracy and English traslation, we urge readers to refer to the original telecast. Read the Inquirer ZTE-NBN deal running account of the Lozada testimony.
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