Jun 28, 2015

The Philippines - 25bn pesos worth aircraft deals grounded by panel

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Just as the nation’s military is racing against time to build up its air defence capabilities amid tensions in the South China Sea, the Commission on Audit (COA) has ordered the suspension of three aircraft acquisition deals forged by the Defence department after state auditors red-flagged them for irregularities.

Documents obtained by Manila Times said the contracts, with a combined value of nearly P25bn, included the P1.2bn helicopter contract, which this paper had exposed and is the subject of ongoing Senate blue ribbon investigation.

Also cited in COA’s notice to the Department of National Defence (DND) and Philippine Air Force officials were the transactions involving the acquisition of 12 fighter jets from South Korea, valued at P18.9bn, and of eight Bell 412EP combat utility helicopters, valued at P4.8bn.

The Manila Times early this year came out with a series detailing the alleged anomalies in the P1.2bn helicopter deal based on documents provided by and interviews with whistleblower Rhodora Alvarez, whose identity was initially masked with the codename Joey.

The jet fighter deal involves the acquisition of FA-50 fighter/trainer jets from Korean Aerospace Inc. The deal was done through government-to-government negotiation with the contract signed during President Benigno Aquino’s visit to Seoul in March 2013.

The revelation of the COA “grounding” notice came a few days after the DND announced the successful maiden test flight of the jets in South Korea last week.

The Korean contractor committed to deliver two of the 12 fighter jets by the last quarter of the year or early next year.

The test flight of the newly manufactured FA-50 jet was conducted on June 19.

A team of PAF pilots and ground crew are also in training in South Korea on how to handle the jet fighter, which is patterned after the US-made F-16 Fighting Falcon.

Two of the eight brand-new Bell 412EP helicopters have reportedly arrived early this month and are assembled and tested in a secured Air Fforce facility.

A total of six helicopters from Bell Helicopter Canada are expected to be delivered until August this year.
Like the jet fighter contract, the Bell 412EP acquisition involved a government-to-government transaction with Canada through the Canadian Commercial Corp. The contract was signed in March 2014.

A media report quoting Defence Undersecretary Fernando Manalo said three of the eight helicopters will be configured as VIP helicopters for use during the coming Asia-Pacific Economic Conference summit in September. The VIP-configured helicopters would be assigned to the PAF Presidential Airlift Wing.

Alvarez said the alleged anomalies that were flagged by COA auditors validate her claim that there was a pattern of irregularity in the modernisation programme of the Armed Forces of the Philippines.

“This is the pattern of irregularity that I was talking about. The P1.2bn deal with Rice Aircraft Services Inc is just a tip of the iceberg, a speck of dust in a multitude of wrongdoings in the (Defence) department. This has to stop for the sake of our lowly soldiers who sacrifice limbs and lives for the country,” Alvarez said in an interview.

“I thank the COA for its diligence and sense of justice. I know this is not the end of the road because the Notice of Suspension and the issuance of an AOM (Audit Observation Memorandum) is just the beginning of a lengthy process. But I’m glad it has begun,” she noted.

A DND insider said the notice issued by the COA tells the PAF technical working group that a meeting has been called by the DND to deal with the COA suspension.

The notice, which was reportedly green-lighted by Defence Secretary Voltaire Gazmin, tasked DND Assistant Secretary Patrick Velez to preside over the meeting.

The notice indicated that the sole agenda for the conference was “Compliance to the AOM/ Notice of suspension issued by COA on the above-mentioned AFP modernisation programme projects.”

Velez as well as Undersecretary Manalo, a former Air Force general, were among the DND officials whom whistleblower Alvarez had accused of “tailor-fitting” the UH-1D project specifications for Rice Aircraft Services Inc.

Joel M Sy Egco

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