Sandigan hears Salcon

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Sandigan hears Salcon

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Dela Serna; Relampagos; Chatto
Dela Serna; Relampagos; Chatto

After 15  long years, the festering legal saga tagged as the most high profile graft case in the annals of Bohol’s history will finally be heard on it’s merits by the Sandiganbayan 1st Division after the celebrated  case filed against a former governor, vice governor, six former board members, a former provincial attorney and a private businessman was elevated to the anti graft court by the Ombudsman.

The case was raffled on Friday, October 30, 2015 and fell on the sala of the Sandiganbayan 1st Division chaired by Associate Justice Efren De la Cruz and Rodolfo Ponferrada and Rafael Lagos, senior and junior members respectively with  none of the accused arrested as earlier bared by lawyer Victor de la Serna,one of the complaints.

Ombudsman Conchita Carpio-Morales approved on October 21, 2015 for filing with the Sandiganbayan SB15 CRM 0283 for violation of section 3 (G), RA 3019, as amended (Anti-Graft and Corrupt Practices Act) against former Governor Rene Relampagos, now 1st District Congressman, former Vice Governor Edgardo Chatto, now Governor and Vice Governor Concepcion Lim, then board member.

Also indicted were former Board Members Arnold Lungay, Isabelito Tongco, Eufrasio Mascarinas and Felix Uy including present Board Member Tomas Abapo, Jr who was also a member of the SP during the deliberation and signing of the Joint Venture agreement.

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Atty. Inocentes Lopez, former Provincial Attorney and Dennis Villareal, officer and representative of the consortium were among those included in the graft case.

All of the above were accused by the Ombudsman of entering into contracts or transactions which are manifestly and grossly disadvantageous to the government.

BIG DIFFERENCE

Ombudsman Assistant Special Prosecutor Manuel Soriano Jr. accused the then top officials of the Provincial Government of Bohol of transferring the assets and franchise of the province owned water and power systems to Salcon Power and Water Consortium for P150 million despite the fact that the combined value of the two utilities is P782 million or a difference of P632 million.

Under close scrutiny, the figures appearing in the Ombudsman information is far less than those alleged by the complainants which is a staggering P1.4 billion according to one of the complainants, Atty. Victor De la Serna.

A certification from the Provincial Accountant’s Office hewed closely to the figures as shown in the Ombudsman criminal information that  the total assets of the Provincial Government including the Provincial Public Utilities Department, operator of the electric and water utilities amounted to only P628,751,509.93 as of December 31, 1999.

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BAIL

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Anticipating the issuance of warrants of arrest by the Sandiganbayan, Chatto, Lim, Tongco, Abapo, Jr., Uy and Lopez filed their bail bonds at the RTC Branch 49 on October 29, 2015  while Lungay and Mascarinas are reportedly out of the country.

The six accused filed a P30,000 cash bond for their temporary liberty while Relampagos opted to file an omnibus motion to quash information, prevent the issuance of warrant of arrest and judicial determination of probable cause as part of a legal strategy, according to Atty. Lord “Popot” Marapao lV, legal spokesman of Chatto and Relampagos.

Six of the original sixteen accused are now deceased – former board members Exequiel Madrinan, Severino Caberte, Francisco Alesna, Sr. Renato Lim and Lemuel Digal and Juanito Cambangay, Provincial Planning and Development Officer.

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Two former Board Members who did not participate in the voting escaped indictment – Roberto Cajes claimed there was undue haste in the approval of the ordinances and resolutions in support of the joint venture and Godofreda Tirol who was absent when the deal was approved by the Sangguniang Panlalawigan (SP)

Two members of the SP when the Joint Venture Agreement was approved were re-elected and  are still with the present SP – Abapo and Tirol.

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SWEETHEART DEAL

Former OIC Governor Victor dela Serna, Tagbilaran City Councilor Alexander Lim, the late Human Rights Lawyer Nerio Zamora, former JAGO lawyer Zotico Ochavillo, former Board Member Aster Piollo and Women’s Right lawyer Myrna Pagsuberon filed the graft complaint in behalf of the Association of Concerned Tagbilaranons (ACT).

The Bids and Awards Committee awarded the contracts under a Joint Venture Agreement to a consortium of Salcon International Inc., Salcon Power Corp. and Pure and Pam, Inc. for the electric utility and to the lone bidder for the water utility – Salcon International Inc., Salcon Philippines Inc and Salcon Limited.

But petitioners also claimed that the JVA was a “sweetheart deal” since SALCON was “pre-ordained to win in the bidding considering that as early as April 1997 Relampagos entered into a MOU with SALCON to conduct a study for the improvement of the water and electric distribution system owned by the province.

According to petitioners the study gave SALCON “the benefit of three years advance study of the project”.

The deal was hatched by the provincial government to address the need to improve the power and water services of Tagbilaran City and was hailed by the public and private sectors including non government organizations as a model for an LGU/Private Partnership venture.

POWER, WATER JOINT

VENTURE SUCCEEDS

The Provincial Government of Bohol maintains that it was the best move when it entered into a Joint Venture which proved advantageous to the Provincial Government.  This assessment was reached in a meeting of the Local Finance Committee (LFC), which analyzed the details of the project’s benefits and advantages vis-a-vis the repeated but still unsubstantiated statements of the project’s critics. This position was further affirmed in a meeting of the Management Executive Board (MEB), a body composed of all department heads and heads of attached agencies of the Provincial Government.

In said analysis, the advantages and benefits of the Joint Venture were multiple, foremost of which was the establishment of a much more efficient service of both power and water utilities, as widely recognized by the consumers who remember the difficulties under the old Provincial Electric and Waterworks Systems. The public’s appreciation of the joint venture surfaced during a random survey conducted during the top-rated radio program “Inyong Alagad” last week.

The LFC’s analysis further found that it is entirely wrong to say that the combined value of the province’s power and water utilities was P782M prior to the joint venture. That would have been an impossibility, because the figure would have exceeded the total value of ALL the assets of the Provincial Government of Bohol as of December 31, 1999.

The Provincial Accountant’s Office Report as well as the COA Audit Report show that the province’s total assets in 1999 amounted to ONLY P628M, which included the value of both power and water utilities, 10 hospitals, the Provincial Capitol Complex and its annex buildings, and all other assets of the Provincial Government.

The common consensus of both the LFC and MEB was that the critics’ claim that the combined value of the utilities (power and water) amounts to P782M is both deceptive and malicious. An even more dishonest argument is the addition of the appraised current market value of P135M by the Asian Appraisal of the two utilities prior to joint venture, and the future joint venture business projected value in the forecasted amount of P647.523M, which is merely its POTENTIAL worth, if the joint venture partners would infuse additional funds to pay off existing debts and acquire additional assets. These computations are mere future estimates and not the current value of the two utilities at the time of the project’s inception.

In fact, the certified actual value of the two utilities in the books of the Provincial Accountant’s Office, and as stated in the COA Annual Audit Report, was merely P80 million at that particular time.

FAIR DEAL

The terms and conditions of the joint venture for power states that present total rates prevailing at that time shall be lowered, no increase in basic rates for at least 5 years, a 4% discount to all consumers if power demand reaches amounts projected by the Provincial Government.

The purchase and installation of additional transformers and substations, the replacement of rotten electric posts, the purchase and installation of reconductoring lines and equipment were also included in the agreement.

the absorption of all employees of the provincial electric system by the winning bidder with the same or even better employment terms formed part of the conditions.

An additional up-front cash of P75 million and free 30% equity in the joint venture (JV) company valued at P22.5 million were also part of the deal.

For the water agreement the JV shall lower rates by P0.30/cubic meter and no increase shall be implemented for at least 2 years while granting an  additional discount for consumers using less than 10 cu m per month.

Comprehensive rehabilitation, upgrading and expansion of all water equipment and facilities shall be undertaken by the JV company and the absorption of all employees of the provincial water office with the same or even better employment terms.

The JV shall also assume the loan incurred by the Provincial Government for the 1997 rehabilitation of the water system in the amount of P21 million, up-front cash of P80 million and  free 30% equity in the JV Company, valued at P24 million.

LEGAL TRAIL

Several legal setbacks were encountered by petitioners in the RTC and the Court of Appeals with the Ombudsman’s reversal resolution as their big break.

At the outset, petitioners also filed a petition for prohibition and issuance of a TRO which was granted by RTC Branch 4 Judge Achilles Melicor but was dissolved and denied petitioners application for the issuance of a writ of preliminary injunction.

Petitioners filed a motion for reconsideration (MR) but Melicor inhibited after they filed a demand for immediate inhibition. The case was re-raffled to Judge Venancio Amila, RTC Branch 3. Amila dismissed the case for lack of jurisdiction and also denied their MR

After the denial of their MR petitioners went to the Court of Appeals 8th Division which issued a 60 day TRO but eventually dismiised the case for “bending the strict rules on wrong mode of appeal” and for their failure to “come up with a cause of action which would entitle them to judicial relief”.

BREATH OF LIFE

But on August 22, 2014, Ombudsman Conchita Carpio Morales approved the filing of graft charges against Chatto/Relampagos et al that reversed a previous recommendation for dismissal for lack of merit issued on February 22, 2001 by Graft Investigation Officer ll Sarah Jo Vergara and was approved by Deputy Ombudsman for the Visayas Primo Miro on March 21, 2001.

However, Ombudsman Aniano Desierto and Merceditas Gutierrez failed to act on the recommendation but the dismissal of the graft complaint was eventually approved seven years later by Orlando Casimiro, Acting Ombudsman on July 2, 2008. (Chito M. Visarra)

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