P15.7 billion Navy deal aboveboard — Defense Sec. Lorenzana

MANILA, Philippines — Defense Secretary Delfin Lorenzana yesterday admitted that there should have been another review of the P15.7-billion Frigate Acqusition Project (FAP) from Hyundai Heavy Industries (HHI) of South Korea before he signed the contract last October.

Testifying before the Senate committee on national defense chaired by Sen. Gregorio Honasan, Lorenzana, however, maintained that the contract remains aboveboard and that the government stands by its decision to agree with HHI’s recommendation for the vessels’ combat management system (CMS).

Asked by Sen. Manny Pacquiao if he would have given the notice of award to HHI if he knew of the South Korean supreme court’s adverse ruling against the giant shipbuilder, Lorenzana said, “No, I will not.”

In its ruling last December, the high court reportedly banned HHI from participating in South Korean government projects for two years in connection with a bribery case.

Lorenzana said he signed the notice of award to HHI last August and signed the actual contract in October. The news on the ruling came out only last December.

HHI local representative Sandra Han told the hearing that the firm did not inform the Department of National Defense of the case since they were not asked about it.

The spadework of the FAP was done during the Aquino administration. Former defense chief Voltaire Gazmin told the inquiry that the previous government intentionally did not issue the notice of award and sealed the contract to avoid allegations that the FAP was a midnight deal.

Gazmin said this was also to give the incoming Duterte administration a chance to review the contract, which requires the HHI to deliver fully functioning frigates by 2020.

The controversy stemmed from allegations that Special Assistant to the President Christopher “Bong” Go intervened to allow HHI to dictate its choice of the CMS supplier, Hanwa Systems, which fields its Naval Shield as the CMS of the frigates.