Proxy war in CALAX bidding


THE past weeks saw print of several articles on the planned rebidding of the CALAX project. No less than PNoy realized that “a re-bid would be the proper course of action on this particular issue.” He told members of the Foreign Correspondents’ Association of the Philippines that to “accept the winning bid at this time, when there is an allegation that there was a much superior bid, then we will have to explain to the people the P9-billion difference that we forego.”

After PNoy’s announcement, the Makati Business Club, assisted by the Management Association of the Philippines, obviously in support of the Ayala consortium, came out with a statement that having the project rebidded would send the wrong signals to future investors. Soon after, the Philippine Chamber of Commerce and Industry came out with their own thru its President Alfred Yao. So far, it seems like a re-bid would proceed only on that date that is yet to be set for the rebid. But what is the wisdom behind the President’s decision? It seems like it all boils down to where our people can benefit the most.

Mr. Rolando Dy of the University of Asia and the Pacific in an article introduced the Benefit-Cost Analysis (BCA) as a technique for evaluating a project or investment by comparing the economic benefits with the economic costs. As experts know, investments drive economic growth. The quality of project or investment determines their impact on society, especially the poor.

Dy says the BCA has several objectives. First, the BCA can be used to evaluate the economic merit of a project. Second, the results from a series of BCAs can be used to compare competing projects. BCA can be used to assess business decisions, to examine the worth of public investments, or to assess the wisdom of using natural resources or altering environmental conditions. Ultimately, BCA aims to examine potential actions with the objective of increasing “social welfare.”

While his application delved on the country’s favorite projects: irrigation, farm-to-market roads, and post-harvest facilities, I see its application in the current controversy over the rebidding of the CALAX project. I wonder if the DPWH did a BCA on the CALAX project. And if they did, how can they allow the glaring 9-billion peso difference. I gotta give it to the President. Sticks and stones may break his bones but names will never hurt him.

God is Great!


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1 Comment

  1. Exactly! The DPWH-BAC has a lot to answer for this ruckus but as far as the offer most advantageous to the government (the taxpayers) is concerned, rebidding is the 2nd best option next to awarding the contract outright to SMC!