8 JUNE 2021 

UNDP respects the role of the Committee of Good Government and Public Accountability and is committed to support its on-going review. Since the beginning, UNDP has consistently shared important documentation, which is available to the public, in keeping with UNDP policies. UNDP has a long-standing commitment to transparency, with Country Offices publishing financial, procurement, and programme information on its respective websites, on an annual basis.

The pandemic has amplified how vital internet access is to people’s daily lives. As a UN agency dedicated to helping eradicate poverty, reducing inequalities, and building resilience, UNDP agrees with the Committee that the lack of internet access will disproportionately affect people in vulnerable communities. We recognize this because we have been a partner of the Philippines for 60 years, providing development assistance, especially to the most marginalized communities. 

The DICT-UNDP Free Wi-Fi for All project supports the DICT’s commitment to accelerate the roll-out of the ‘Free Wi-Fi for All National Program’, under Republic Act 10929. Consistent with our development mandate, this project covers the provision of free Wi-Fi internet service to 6,000 geographically isolated and disadvantaged areas that are in difficult to reach terrain, off the grid, and out of reach of commercial networks. The 6,000 locations are just five percent of the total sites of the National Free Wi-Fi Program, slated until 2022.

UNDP has a deep and fruitful relationship with the Government of the Philippines. For 60 years, UNDP has supported the enhancement of the country’s capacities at the national and local levels. UNDP work has helped strengthen institutions, bolstered the sustainable management of natural resources, and contributed to national recovery from disasters and conflicts. 

UNDP was here lifting rubble before Haiyan, during Haiyan and every natural disaster since. UNDP was here last year with cashless mobile transactions to reach communities in Pasig during the lockdowns. And UNDP is here now, supporting the Department of Health (DOH) and the National Inter-Agency Task Force for the Management of Emerging Infectious Diseases to gather and analyze COVID-19 data, to inform the government’s recovery strategy. 

UNDP is working within the UN system to ensure that the DOH and the country’s vaccine institutions have accurate, real time data, to facilitate the timely deployment of COVID-19 vaccines. UNDP has provided long-standing support to the Bangsamoro Peace Process and supported the Department of Education to roll-out ICT equipment and solar panels to over 5,000 schools in remote areas. It is in that spirit of partnership and commitment that UNDP took on the implementation of the Free Wi-Fi for All project in remote areas, where people are in most need of support. 

In partnering with UNDP for the project, DICT recognized UNDP’s experience, namely: (1) its demonstrated capability to reach at scale the most disadvantaged and disconnected communities, (2) the experience to provide the full range of capacity building support required by the agency, (3) the ability to draw on technical expertise on information and communications technology internationally, and (4) the expertise in implementing projects to achieve the Sustainable Development Goals.

Upon the request of DICT, UNDP entered the partnership to provide development support services to implement DICT’s priority program. This partnership is between institutions and not their principals.  

Signed in September 2018, the Financing Agreement is a Cooperation Agreement between UNDP and DICT, for the implementation of the project. UNDP entered this partnership not as a procurement contractor but as a development partner.  The agreement included three tranches from DICT amounting to PHP 1,362,084,618.28 from September 2018 to April 2019, for the delivery of the project. As stated on 1 June 2021, UNDP has already returned to DICT the amount of PHP 283,992,240 (USD 5,880,000), through the Bureau of Treasury. 

UNDP is not a commercial entity and bills fees only for cost recovery. Therefore, UNDP has only charged for the recovery of its General Management Support (GMS) services, for service rendered – for the delivery of the 882 validated sites. 

In relation to due diligence, UNDP wishes to clarify that across our network of 170 offices around the world, UNDP follows internationally recognized high and strict operating procedures. UNDP in the Philippines undertook a transparent and fair international competitive bidding process, in sourcing contractors for this project. 

All procurement processes were conducted following standard UNDP policies and procedures on procurement abide by the principles of fairness, integrity, and transparency. Bids were received from consortia of national and international bidders and evaluated as per the published criteria, in the solicitation documents. Technical evaluations were conducted by a panel of high caliber technical experts nominated by UNDP, and financial evaluations were done by finance and procurement teams. DICT participated in this process as a member of the technical evaluation panel. 

For 5,000 of the 6,000 sites entrusted to UNDP, bids from Speedcast Limited in a teaming agreement with PHILCOMSAT were selected, following a rigorous sourcing process that evaluated both their technical and financial capabilities. The bid they jointly put forward was the best proposal that met our basic procurement principle: the best value for money. We believe that the strong combination of international and local expertise offered by the two companies was the best guarantee for successfully implementing the programme. 

UNDP acknowledged that implementation would be challenging given that the sites are in geographically isolated and disadvantaged areas, where none of the traditional telcos operate.

The geographic challenges were compounded by the COVID-19 pandemic. Like all other businesses and entities, the DICT-UNDP project could not escape COVID-19 related restrictions, and mobility limitations.  On top of this were commercial challenges faced by the contractor and its sub-contractor that further affected the delivery on the ground.

In April 2020, UNDP was informed that Speedcast voluntarily filed for balance sheet restructuring under Chapter 11 of US Bankruptcy Law. DICT was informed about this in a letter dated 4 May 2020. Speedcast updated UNDP on the progress of the restructuring through regular meetings, until Speedcast emerged from Chapter 11, in March 2021.  

Since the U.S Chapter 11 process involves financial restructuring aimed at reducing funded debt and gaining access to new sources of investment, it did not affect the implementation of the Wi-Fi Project. We note that most of the sites (613 sites) under this project were installed during the period when Chapter 11 proceedings were on-going. 

Delays, particularly in site activations, have been frustrating. UNDP extended its support and solicited in several instances the two contractors to come together to address bottlenecks and meet implementation challenges. UNDP also revisited deployment plans and re-negotiated catch-up plans, with approval of DICT. This was all done to keep the project going, so that it could continue to provide much-needed free internet access to last mile sites, despite implementation challenges brought about the pandemic crisis.

Moving forward, in view of DICT’s strengthened capacity, UNDP has agreed on mutual guiding principles in executing the project. UNDP has agreed to terminate its contracts with Speedcast, and to return unused funds from these contracts to DICT. A first amount of USD 5.8 million has already been returned to DICT, and as we liquidate services rendered to date, further refunds are in discussion with DICT.  

UNDP has stressed to our partners the need to ensure that the 882 free Wi-Fi sites, delivered by the DICT-UNDP project, continue to provide services to the 350,000 citizens in those remote areas, which prior to the project had limited or no access to internet. UNDP is pleased to note that the Committee has taken the same position and shares UNDP’s views that vulnerable and remote communities should not be underserved. 

During the pandemic, the free Wi-Fi service has been extremely beneficial to low-income communities in provinces such as Isabela, Cagayan, Benguet, Palawan, Davao del Sur, Lanao del Sur and Sorsogon. With 303 out of 882 activated sites located in public schools—141 of which are schools equipped with ICT gear under the DepEd-UNDP K-12 Computerization Program—the free Wi-Fi service has aided teachers and students, by providing access to teaching and learning materials. We hope these sites will not be adversely affected and the services can continue.  

UNDP entered into this agreement to support the Government and people of the Philippines, knowing that the work would be challenging. It was undertaken because of our commitment to make a meaningful contribution, where UNDP experience can be of service. Despite the difficulties, UNDP will continue to work to reach last mile sites, in line with our mandate to leave no one behind, here in the Philippines, as well as across the world.  

 

 

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