by ROEL R. LANDINGIN

COLLUSION, LIKE beauty, may be in the eyes of the beholder — or the investigators — at least as far as public-works projects in the Philippines are concerned.

When the World Bank’s powerful and dreaded anti-corruption unit, the Department of Institutional Integrity (INT), looked closely into three rounds of international public tenders for two Bank-funded road projects in the Philippines between 2002 and 2006, it found convincing proof of collusion and excessive pricing among some of the 15 Filipino and foreign bidders.

	EXCLUSIVE READ the decision of the World Bank Sanctions Board declaring EC de Luna Construction Corp. and Eduardo C. de Luna ineligible indefinitely to be awarded a contract under a World Bank-financed or -executed project for collusive practices.

A fortnight ago, the World Bank’s sanctions board barred four Chinese firms and three Filipino companies from participating in any Bank-funded project for at least four years for their alleged role in the collusive scheme to artificially inflate bid prices.

One Philippine company and its owner were de-listed permanently, and two other local firms, suspended for four years. A Korean firm, which did not contest the allegations, was debarred for four years in August last year.

In stark contrast, at least two investigations conducted by the Department of Public Works and Highways (DPWH) found no evidence of collusion and overpricing, respectively, in the 2002 and 2004 rounds of civil works tenders for two road projects being funded by a $150-million loan from the World Bank.

Under ordinary circumstances, that would just be taken as a difference of opinions between two groups of experts. But in the Philippines, where public distrust of the DPWH is very high, the sharply opposing conclusions are fueling public perception that department officials are in league with road-building contractors.

Already, a senator is making the allegation that one of the debarred contractors is a close friend of Jose Miguel Arroyo, the president’s husband.

To be sure, the difference in conclusions could be partly because some of the evidence, particularly testimonies of people who told the World Bank investigators about the collusive scheme, were not made available to the DPWH.

But the Bank investigators also relied on other data available as well to DPWH officials.

'STRANGE, UNNATURAL'
The January 2009 decision of the Bank’s sanctions board, a copy of which was obtained by the PCIJ, reads in part: “(The) circumstantial evidence consists of alleged indicia of collusion, including high bid prices, symmetrical relationships among bids, bids containing significant errors, ‘clusters’ of bids, ‘strange and unnatural’ bid prices, submission of fraudulent bid securities, and inconsistent application of criteria within the prequalification process.”

A PCIJ analysis of the bids showed that in five of seven cases, the percentage difference between the lowest and second lowest bids was always several times higher than the percentage differences between all the other bids. (see graph)

Procurement experts say that the clustering of bids or symmetrical relations among bids is a possible indication, although they clarify that it is not a conclusive proof of collusive behavior.

How much elbow grease was used in the investigations could be another factor that may explain the difference in findings.

Former public works secretary Fiorello Estuar, who helped oversee an investigation of collusion that led to the suspension of some 80 road-building contractors in 1987, recounted that the investigators then had to sift through hundreds of pages of bidding documents to look for evidence of connivance.

“We found evidence — bids from rival firms prepared in the same handwriting or containing the exact same unit prices and quantities,” recalled Estuar. “In some cases, the same spelling mistakes could be found in competing bids. They spelled bunker fuel as ‘banker fuel’.”