More on BSP Currency Anomaly: the True State of the RP Security Plant

(Reposted from Lamang Lupa)
Since 2003 the BSP has been engaged in protracted discussions and evaluations regarding the acquisition of new printing equipment with KBA-Giori of Switzerland and Komori of Japan.

• The technology of KBA-Giori (Switzerland) is recognized, by both state-owned and private printers, as the worldwide standard for banknote printing, More than 90% of all banknotes currently in circulation in the world are produced on KBA-Giori machines, including 100% of the Philippine currency. The existing machines at the BSP’s SPC, as well the equipment used by the suppliers of finished Peso notes, are from KBA-Giori.

• Komori (Japan), a big manufacturer for machinery for commercial (offset) printing, has newly entered the specialized field of integrated turn-key banknote printing equipment. Machines built by Komori are used for the production of the Japanese Yen banknotes. The only other large-scale installation of Komori banknote presses is at Salboni (Calcutta), one of several printing plants of the Reserve Bank of India.

The process of bidding out the new printing equipment has been drawn out for reasons that few can understand.

• The process began with a negotiated bidding with KBA-Giorri, the supplier of all the other machines of the SPC. In 2008, however, the BSP unilaterally aborted negotiations with the company. It subsequently sent a delegation to Germany, France, Thailand, India and Japan to investigate the feasibility of buying machinery from Komori.

• In October 2009, the BSP officially announced its decision to purchase a new printing line through an open tender and published its Invitation to Bid with an Approved Budget for the Contract (ABC) of USD 56.8 million. However, the tender was subsequently postponed indefinitely before any bidding could take place.

• On June 3, 2010, the BSP’s Bids & Awards Committee (BAC) published a new Invitation to Bid for a complete line of banknote printing and finishing equipment (with increased capacity and performance specifications) with an ABC of USD 71.9 million and a scheduled opening of bids on July 13. KBA-Giori and Komori participated in the pre-bid conference held on June 25. On July 8, the BAC advised KBA-Giori and Komori that “the bidding has been moved to a later date to be advised” as a result of KBA-Giori’s objections to Komori’s efforts to modify the bid specifications retroactively (eligibility and certain technical requirements).

The long drawn-out evaluation and negotiation process, stretching over more than six years, is contradictory to the urgent need to upgrade and increase the printing capacity at the SPC.