MANILA, Philippines – Despite a “concerted effort” to stop a multi-billion peso frigate acquisition project, Defense Secretary Delfin Lorenzana on Wednesday, March 7, told reporters the much-awaited upgrade to the Philippine Navy is pushing through.

“I think we have resolved the CMS (Combat Management System) issue. There wasn’t a problem in the first place… it is continuing now [and] it will be delivered in 2020 and the next one, in 2021,” said Lorenzana on the sidelines of a House probe into the project and the sacking of former Navy chief Ronald Mercado for supposed subordination.

What’s at stake? The Philippine Navy, among the weakest in the region, is seeking a much-needed and long-awaited upgrade through the acquisition of the war ships. It’s a huge deal, costing the Philippine government over P15.7 billion.

The winning bidder was Heavy Hyundai Industries (HHI), a South Korean company.

It comes as a crucial time, given disputes with China, who has practically claimed the entire South China Sea. A strong navy is also a must for an archipelago such as the Philippines.

Recently the project was put under the spotlight.

Issues hounding the project first became public in December 2017, after Mercado was unceremoniously sacked from the post. Lorenzana then – as he does now – says it was Mercado’s apparent refusal to follow orders that led to his loss in trust on the military general.

Speaking before the House committee on national defense and security, Lorenzana said Mercado “interfered” in the contract, usurped authority, and ignored his orders. Mercado is retiring on March 9.

After Mercado was sacked, he was replaced by Robert Empedrad, the management leader for the project.

Why is it controversial? Mercado had an alleged “fixation” on picking Tacticos Thales for the CMS of the frigates, according to Lorenzana. The CMS is key – it’s the heart of the ship.

According to the defense chief, himself a former military officer, Mercado had stalled the project and even threatened to end it, because he preferred Tacticos over Hanwha Systems, which HHI had preferred.

A controversial provision in the contract gives the HHI, the shipbuilder, the power to choose the suppliers for the subsystems.

Probes later revealed top presidential aide Bong Go and his office, the Presidential Management System, had apparently played a role in the debate. Go’s office asked Mercado through Lorenzana to explain a paper that was endorsing Hanwha. The office later summoned Navy officers to discuss the CMS purchase.

What now? Lorenzana said Hanwha will still supply the CMS. The “preference” of the Navy doesn’t matter, said Lorenzana because it’s “compliance” with the country’s procurement law that should be the basis.

“It’s as if I want a Mercedes but my money can only afford a Toyota Innova. That’s just how it works,” he added. – Rappler.com