Un-Aussie venture botches Duterte’s free WiFi project

The Duterte administration’s program to provide free WiFi services in rural areas has suffered an indeterminate delay after the Australian satellite communications provider hired by the United Nations Development Program (UNDP) has declared bankruptcy.

The Australian firm, SpeedCast, filed for bankruptcy protection in April, only six months after being appointed by the UNDP as contractor for the P1.3-billion Philippine government project. According to the grapevine, Information and Communications Secretary Gregorio Honasan II is now scrambling to save the project by possibly even jettisoning the UNDP as project manager, especially after finding out that the local project officer that UNDP had hired to oversee the nationwide WiFi program turned out to be a civil engineer, instead of an electronics and communications engineer, who used to work for the Department of Agrarian Reform. Even at the program inception, the UNDP’s appointment to manage a key Philippine government project had already been questioned by the Commission on Audit (COA), especially since UNDP, after taking P106 million in “service fees,” would pass on the implementation of the P1.3-billion project to a foreign contractor.

“Furthermore, the engagement of UNDP to undertake the project tends to add another cost layer in the sense that instead of the department (DICT) directly dealing with contractors through public bidding, it will now be the UNDP who will do so at an additional five percent service fee,” COA said in its 2018 audit.

But then acting secretary Eliseo Rio Jr. prevailed on the audit agency, claiming that the DICT “lack(ed) capacity to undertake the specific procurement project,” among other reasons.

Taking a leaf from UNDP, the chosen foreign contractor, SpeedCast, then subcontracted the installation of the WiFi towers to local hires, using the list of 3,000 locations drawn up by the UNDP as guide.

As it turned out, about 250 rural sites out of the first batch of 500 sites for the construction of mini towers had wrong coordinates, with distances sometimes off by kilometers, according to an internal DICT document.

Because of the location and LGU coordination problems, only 225 cell sites out of the 3,000 phase-one target have so far been activated by the time the coronavirus lockdown was imposed, according to a field report to the DICT.

But the UNDP’s project assessment is far more optimistic. According to the UNDP website, a total of 2,677 free WiFi sites were already operational as of June 2019.

Another 6,000 WiFi sites are supposed to be built by UNDP in the next project phase to connect the “remotest, unserved and disadvantaged communities” had not the coronavirus pandemic and the SpeedCast bankruptcy intervened.

According to the grapevine, Honasan is weighing the diplomatic and legal repercussions of rescinding the UNDP contract against the additional bureaucratic delay of seeking a new round of public bidding for the project’s phase 2, which should cost between P2.5 billion to P3 billion more.

In the meantime, SpeedCast has been assuring the DICT and UNDP resident representative Titon Mitra, an Australian national despite his famous Filipino surname, that the Australian telecom company should emerge out of the bankruptcy proceedings with fresh capital from its lenders by the end of the year.

“We do not currently expect to initiate a restructuring process in any other jurisdiction,” SpeedCast said in a statement. “We believe the chapter 11 process (that the company filed in the United States) will allow us to continue to operate our business as usual and achieve our financial goals across our global business.”

According to a Bloomberg report, SpeedCast, said to be the world’s largest satellite communications provider, has commitments from current lenders for a $90-million bankruptcy loan.

The Bloomberg report added that the bankruptcy filing does not include SpeedCast’s government-business entities, which provide satellite communication and reconnaissance platforms to the United States and others.

Zamoras get P1B ayuda

The Zamoras of San Juan will be receiving a P1 billion ayuda to tide them over for the duration of the coronavirus pandemic.

Their Nickel Asia mining company last week declared P0.22 dividend per share, on top of the P0.08 cash dividend the listed firm distributed in March.

Nickel Asia chairman emeritus Manuel Zamora Jr., son and president Martin Antonio Zamora, and daughter/director Maria Patricia Riingen own about 3.6 billion shares, equivalent to about 26 percent stake in the company.

Japan’s Sumitomo Metal holds a slightly larger stake at 26.5 percent stake.

Fellow director Philip Ang owns another 1.83 billion shares, equivalent to 13.43 percent stake in Nickel Asia, which should give the former bankrupt textile mill owner about 550 million reasons to be grateful despite the country undergoing the worst recession, post-World War II.

Another director, investment banker Luis Juan Virata should have P388 million added in his already deep pockets to fight lockdown depression.

In all, the two cash dividends that Nickel Asia has declared amount to over P4.1 billion. Against Nickel Asia’s P38.5 billion market cap, that is a rich vein indeed.

To put it in perspective, the Nickel Asia windfall placed the Zamoras at par with the Zobel de Ayala clan, at least for this year.

The country’s oldest listed conglomerate, with P440 billion market cap, Ayala declared about P2.17 billion cash dividend last June, only about half of what was declared last year. By tradition, Ayala should be declaring another tranche by December, but that is another story.

Heard through the grapevine

She just finished her MA Painting degree from the Royal College of Art in London, but already SM heiress Nicole Coson has been booked in the Bloomberg New Contemporaries art show at the South London Gallery.

Because of the coronavirus pandemic, no date has been set yet, but sometime between next December and March is being penciled in. Hopefully the travel restrictions shall have been lifted by that time so doting mother Teresita Sy-Coson could attend the opening.

E-mail: moneygoround.manila@yahoo.com