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Pot Luck
By Michael Alan Hamlin
March 24, 2003
Last week was one of those times
when choosing what to write on was akin to the dilemma of deciding
where to start attacking a table loaded with a large pot luck meal.
Who's adobo flakes are flakiest? Which paella will best delight
the senses with a sumptuous bouquet of flavors? Which crispy pata
is really crispiest? Or maybe, they're all just great, and I want
them all!
So glutton that I am, I've decided
to present a potpourri of commentary. I'll start with the light
stuff. A friend from Hong Kong had an interesting experience with
Philippine Airlines (PAL). He's been a loyal PAL Smiles frequent
flier for around two years, and flies back and forth regularly -
sometimes twice a month - between Hong Kong and Manila. In fact,
he was here last weekend, and the weekend before.
Unfortunately, this friend has received
a job offer in Washington DC that is just too good to say "No,"
to, and he's heading back to the states after a three-year stint
in Asia. Before he leaves, he decided he'd like to use his accumulated
PAL Smiles mileage to upgrade to business class last weekend. But
when he went to make arrangements Wednesday, he was told that the
request would take four to nine days to process!
How's that for efficiency? What?
You're not surprised? Gee, I'm shocked. Anyway, my friend was, naturally,
pretty incensed. So he called up Cebu Pacific, and booked an economy
class seat. The process presented a couple of happy surprises. First,
the airfare was about half what he would have paid PAL. Second,
when he told the reservations assistant why he was booking on Cebu
Pacific instead of PAL, she upgraded him to business class on the
spot. I guess we know who has the loyal customer now.
But why should PAL care? After all,
my friend is heading back to the U.S., and won't be flying PAL or
any other airline much anymore. Well, there are at least two reasons
why PAL should care. First, my friend is well connected in Asia,
and he'll share this story with as many people as he possibly can.
And since he's a journalist, that network is likely to expand pretty
exponentially. While he's too principled to gripe about his own
experience, PAL probably won't be able to count on his good will
when an opportunity comes to write a legitimate story on airline
travel in Asia.
Second, he won't take PAL home, or
use PAL on any of his future, and frequent, visits to the region
from his new base. This customer is history. And it doesn't take
too many disgruntled business class and full fare customers to make
a significant dent on revenues.
Now, on to weightier matters. Among
them is developments with the infamous G-EPS bid. Last week Department
of Budget and Management secretary Emilia Boncodin said that the
winning iTBF partnership is a joint venture, which was disclosed
to the Inter-Agency Bids and Awards Committee, and that even if
it can't legally sign a contract the government can run after the
partners. You'll recall last week that I suggested it might be difficult;
i.e., impossible, to sign a binding agreement with an organization
that doesn't have a legal personality.
Ms. Boncodin's statement, however,
betrays the arbitrary application of procedural rules by IABAC.
First, sources inside DMB say that the iTBF JV wasn't freely disclosed.
Disclosure came when a member of the committee requested clarification
of the true relationship between the iTBF partners. That might seem
a minor technicality, but in BayanTrade's view - a member of a disqualified
(and registered) consortium - a far more minor technicality resulted
in its early disqualification from the bidding.
The BayanTrade (Full Disclosure:
BayanTrade and some other firms that bid for the G-EPS are clients
of mine.) consortium was disqualified because it didn't fill out
a form listing its partners (although it submitted a notarized secretary's
statement providing this information). But EWETC - iTBF's original
incarnation - has been reincarnated during the evaluation process,
evolving from informal coalition with no personality to unregistered
JV - using an entirely different name - with no legal personality.
And not only was no penalty assessed, iTBF instead has been proclaimed
the winner of the bidding. Weird, huh?
One of the reasons the technical
infractions are important is the obvious fact that the penalty -
disqualification - isn't uniformly administered. This arbitrary
application of procedural penalties certainly suggests that procedural
technicalities were employed to eliminate strong contenders. In
fact, another consortium was disqualified because its bid documents
arrived a whopping six minutes late.
Another reason it's an issue is that
the government cannot sign a legal contract with a firm that has
no legal personality. And even if iTBF registers now, the contract
was negotiated when no legal entity existed. Therefore, as far as
the G-EPS contract is signed, iTBF still has, I'm told, no legal
personality. Registration, for obvious reasons, is not retroactive.
Attempting to make it so is - you guessed it - a procedural infraction.
So what will government do? Sign a contract with five different
partners, representing iTBF's "dis-incarnation?"
Well, the obfuscation now seems destined
to go on for quite some time, although the next IABAC meeting is
scheduled to take up a position paper submitted by Ayala Systems
Technology, Inc. - the runner up in the bidding process - which
summarizes these complaints in its next meeting. I understand from
a friend that it's at the bottom of the agenda.
The third dish on the table has to
do with the U.S. Ambassador acting as the administration's PR flak.
According to a March 19 editorial in The Asian Wall Street Journal,
Ambassador Francis J. Ricciardone admitted to agreeing to take calls
from the Journal's competitors and in those calls criticizing the
paper's editorial coverage of the administration. When one of the
reporters who talked to the ambassador, Thomas Crampton of the International
Herald Tribune, reported the misguided effort to the Journal, the
ambassador and the friends who put him up to this trick found themselves
on the wrong end of a relationship with one of the world's biggest
- and most respected - business publishers.
That's not a pleasant place to be.
But it is a funny story.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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